Study: Supply Chain Function Increasingly Integrated Into Successful Business Strategy

Those of us who work in the field know it to be true. But, now there's new survey data that offers confirmation: These days, supply chain function is widely recognized as an integral part of successful business strategy.

The survey, conducted by the Cranfield School of Management and Solving Efeso, included more than 180 senior global supply chain professionals, and it provides insights about the strategic development and implementation process in some of the world's leading organizations.

The findings show that about two-thirds of those polled have senior supply chain representation in the boardroom, and that supply chain management is now increasingly integrated into companies' overall business strategies. In fact, survey participants identified alignment with corporate strategy and customer service as the leading functional drivers of supply chain strategy; the most important supply chain performance drivers were found to be cost focus, customer lead-time and customer quality.

The report concluded that the most successful implementations have top level support and use vision-led, quantitative modeling and risk management techniques. In addition, the researchers found that success was higher when Finance, Marketing and IT departments were actively involved and accountable in the strategy development process. These results mirror those from an earlier study that also identified a growing trend towards enhanced CFO-CPO collaboration as financial professionals become increasingly aware of procurement's impact on both profitability and risk.

"It is clear that in some organizations, supply chain management is still perceived as a means of reducing cost; not as a means of achieving competitive advantage," says Professor Richard Wilding from Cranfield's Centre for Logistics and Supply Chain Management. "Supply chain strategies should not be developed by individuals in isolation. Other departments such as Marketing, IT and Finance need to be held accountable, rather than just consulted, in the development and delivery of a firm's supply chain strategy."