Aberdeen’s Global Supply Chain Benchmark Report

Aberdeen Group‘s Global Supply Chain Benchmark Report: Industry Priorities for Visibility, B2B Collaboration, Trade Compliance, and Risk Management report, released in June, contains an alarming statistic, especially in today’s information technology driven networked world. An astounding 90% of all enterprises report that their global supply chain technology is inadequate to provide the corporate finance organization with the timely information it requires for budget and cash flow planning and management.

Furthermore, 79% of large companies say that the lack of supply chain process visibility is their top concern. Considering that, as we pointed out in yesterday’s post, understanding your supply chain is key to success, this is a serious concern. After all, if you have no visibility into your supply chain, how can you map it out and understand the real impact of any decision you might make with respect to your supply chain?

Fortunately, this excellent report also contains some solid recommendations for action to get you started.

  • Extend supply chain visibility.
    Move to exception-based management of global supply chain activities and slowly increase the number of milestones you monitor. Start executing against a longer-term roadmap that adds escalation policies, inventory pipeline visibility, mobile asset management, root cause analysis, and financial settlement and financing integration.
  • Scale business-to-business collaboration.
    The most productive collaboration processes are collaborative forecasting, inventory management, and replenishment, so focus on scaling those first.
  • Go corporate-wide with trade compliance.
    Move toward a single corporate-wide trade compliance platform and comprehensive origin and trade agreement management. Smaller companies should look to on-line tools for restricted party screenings and total landed cost calculations.
  • Institutionalize risk management.
    Make risk assessment and contingency planning part of your standard operating procedure. Institute supplier remediation programs for high-risk providers and increase logistics and supply agility to improve recovery capabilities.

Of course, before you can improve collaboration, and identify key milestones, you need to know where to begin. This is where next generation spend analysis systems that provide true visibility into your spend and the inter and intra organization and product relationships, often referred to as spend intelligence systems, and described in Aberdeen Group’s The Spend Intelligence Benchmark Report: Turning Data into Action that also came out in June, play a significant role.

This report also had some solid recommendations to get you started on the road to improved visibility.

  • Securing Executive Sponsorship.
    This is critical for just about any major undertaking, especially one involving an extensive information technology investment. If you don’t have a project champion who can make the case to senior executives, find the one who can offer the most clout.
  • Building a cross-functional team for enterprise-wide spend intelligence.
    Have an intelligence-gathering plan and key stakeholders in place to draw up the goals and expectations of a spend intelligence program.
  • Demonstrating quick hits by assessing spend intelligence opportunities in one or two spend categories.
    Showing the results of a small pilot program can help make the case with senior executives.

Support has to come top down, everyone needs to be involved, and you have to start small and work your way up. But the effort is worth it. After all, the report found that best in class companies reduced sourcing cycles by 19 to 25% while increasing contract compliance rates by 31 to 35%.