Supply chain needs ‘urgent attention’ according to KMPG

November 15, 2012

A report has revealed that supply chains are “no longer in a position to cope with fluctuating customer demands.”

The report, taken out by KMPG, also states that there are fears that new legislation may harm efforts to improve supply chain efficiency. Supply Chain Futures looks into why KMPG believes the broken links in the supply chain need urgent attention.

Many organisations believe that their supply chain operations are no longer ‘fit for purpose,’ mainly due to the threat of economic uncertainty, fluctuating consumer demands and natural disasters.

However, “recognition that a radical overhaul is necessary to improve performance is yet to result in agreement on the steps needed to transform business operations,” according to KPMG.

Their report reveals that the majority of UK organisations are taking on short-term tactics, in a bid to keep their supply chain ticking over. However, only a minority of organisations are fully reorganising their business operations.

Andrew Underwood, head of supply chain at KPMG Management Consulting said, “Now is not the time to batten down the hatches and weather the storm.  Business leaders who do will emerge only to find that opportunity has already passed them by.

“Instead, the time is right for organisations to adopt an agile approach to their supply chain and accept that the ‘one size fits all’ approach is no longer relevant in a multi-channel marketplace.”

The findings suggest that executives are focusing on four core approaches to improving supply chain maturity.

Here are the main core approaches, provided by KPMG:

• “accepting that cost-cutting measures over the past 4 years has not gone far enough, with many now identifying and implementing additional opportunities for reducing costs within, and across, their supply chain;

• “adopting new, low-cost, technologies to enhance transparency for customers and facilitate collaboration amongst partners;

• “making use of outsourcing and shared service centres to consolidate order taking, financing, logistics planning and wider elements of logistics execution;

• “driving better collaboration across the supply chain by integrating sales and operations planning processes.”

View the full write-up of the report here.