@Risk

Economic volatility has been the cause for the majority of supply chain disruptions over the past year and has led to unprecedented challenges in supply chain management, according to a new report from the Aberdeen Group.

The 24-page report, titled “The Supply Chain Executive’s Agenda 2009: Weathering the Recession,”  summarizes the results from a survey of more than 200 supply chain executives worldwide, provides insight about industry trends, and offers recommendations to combat the challenges of the global marketplace.

After all, as the report states:

“The Supply Chain Executive has emerged as a key stakeholder in the company to make transformation happen. Today, senior management is looking for the Supply Chain Organization to deliver more than jut efficiency –it is being asked to deliver innovative cost reduction strategies to help weather the recession, while at the same time not missing any business opportunities brought about by today’s economy.”

Here are a few findings I found particularly intriguing:

• 62 percent of supply chain execs in the survey said that reduction in customer demand had disrupted their supply chain.  Raw materials price volatility (42 percent), fuel price volatility (41 percent), and commodities price volatility (34%) were also cited.

• When asked about the top pressures driving their companies to improve SCM in 2009, survey respondents reported: economic and financial volatility (40 percent), rising supply chain management costs (34 percent), rising business complexity of managing global business (34 percent), escalating customer service demands (30 percent), and increased supply chain risk exposure (22 percent).

• 29 percent said that sustainability/corporate responsibility criteria have been incorporated into their strategies for all SCM processes. 44 percent said that at least some of their SCM processes incorporate sustainability/CSR.  (This echoes findings from another study which found that even though leading companies are integrating sustainability into their overall business plans, it is not yet a core part of most companies supply chain strategies.)

• In this survey, Best-in-Class companies were more than twice as likely as Average or Laggards to use supply chain visibility software (52 percent versus 19 percent).

The report concludes that those companies that had been continuously focused on supply chain excellence were best positioned during the recession. As a result, SCM is now enjoying an elevated profile –a long overdue elevated profile, in my opinion –as one of the critical components of a successful business strategy.

The full report from the Aberdeen Group is available here (registration required).