Supply chains define strategy and deliver performance

The relative importance of supply chain management is on the rise as senior executives are becoming more focused on supporting a return to growth.

As trends and realities in the global economy thrust supply chain management to the forefront of business strategy, executives are realising that supply chain characteristics and capabilities ultimately define how a business can and should operate.

As this new state of affairs takes hold, supply chain managers must both embrace and act upon an evolved and elevated role in strategy formation, leadership and value creation.

Today's volatile markets have forced companies to drive tremendous change and align costs with revenue. Typically functionally focused, this rationalization of resources, combined with the never-ending drive to realize greater value, is producing extraordinary and impactful results.

Though profitability is returning, top-line growth remains elusive — and by most forecasts may remain so for the foreseeable future. Given this realization, business leaders are now seeking to achieve the next generation of productivity gains. In particular, they are upping the ante in terms willingness to innovate in areas such as how and where work gets done.

To achieve this next order of efficiency, companies are moving away from a purely functional focus. They are now taking a global view in terms of standardizing operating processes and/or leveraging end-to-end processes.

It is critical for organizations to recognize that business performance is substantially governed by the supply chain. The supply chain is fast-becoming one of the core determinants of a company's business model. Organizations are now in an era where their operating model is being defined by its supply chain function.

A variety of factors have placed greater and broader demands on supply chains for decades. These include advances in collaborative technology to greater globalisation which have raised the bar for supply chain management nearly incessantly.

With today’s economy, the pressure is on supply chains and success in business is now more dependent on the performance of the underlying supply chain than ever before.

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