Supply Chain Excellence Still Hard to Achieve

According to an opinion survey conducted at the sixth annual Accenture/Stanford Global Supply Chain Management Forum on February 13, 2003, companies are still facing obstacles to achieving supply chain excellence within their companies, and across their suppliers and customers. In fact, according to the supply chain executives who completed the survey, supplier and customer relationships continue to be characterized predominantly as "transactional and contract-based" rather than "open and trusting," limiting the operational and economic potential that new strategies and technologies offer. "Focused executive leadership" was cited as a key element that differentiates the world-class companies from the growing list of "also rans."

• 45 percent of respondents view supplier relationships as "transactional and contract-based"

• 38 percent view customer relationships as "transactional and contract-based"

Interestingly, respondents cited the skills of their executives and workforce training as one of the more significant obstacles to achieving industry-leading extended supply chain capabilities. The survey results support a report from IDC Research noting that the global market for supply chain training grew 42.2 percent last year and is expected to reach $10.5 billion this year:

• 43 percent of Accenture survey respondents cited a "lack of core supply chain management knowledge and skills" as the greatest challenge within their organizations to achieving an optimized, extended supply chain.

• 54 percent cited "lack of core supply chain management knowledge and skills" as the greatest challenge within their supplier and customer organizations to achieving an optimized, extended supply chain.

IT integration continues to be an obstacle to the extended supply chain as well. A majority of respondents--53 percent--view "cost and complexity of integrating systems across companies" as a key impediment to cross-company supply chain optimization.

However, beyond improving supply chain skills and overcoming IT integration issues, Accenture Supply Chain Management partner Al Delattre, one of the Forum's keynote speakers, believes a cultural change is required to achieve more collaborative supply chain processes. Many supply chain executives fail to recognize the significant role that particular leadership skills play in creating and maintaining collaborative processes across the extended supply chain:

• Only 10 percent ranked the "ability to build effective teams" as the most important executive leadership skill

• 0 percent ranked "ability to negotiate" as the top executive leadership skill

This is particularly interesting given that 42 percent of respondents cited creating a win/win scenario as the most important quality to establish when asking partners to implement processes that change the way they do business.

In his keynote speech, Al Delattre made 10 supply chain management predictions for 2003 regarding leadership. A few are listed below:

• Leaders will find the transformational opportunity where others think there is none

• Leaders will know what they're good at and what they're not

• Leaders will force rank the priorities and focus where they can really make a difference

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