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Follow the leaders: Scoring high on the supply chain maturity model – An Australian and New Zealand perspective

In 2003 when IBM last undertook a supply chain management study of this magnitude, the stand-out objective of leading supply chains was to increase profitability – while, at the same time, reducing costs and improving quality.
IBM Institute for Business Value study
Industry: Cross-industry
Last updated: 30 Mar 2006
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Summary

In 2003 when IBM last undertook a supply chain management study of this magnitude, the stand-out objective of leading supply chains was to increase profitability – while, at the same time, reducing costs and improving quality. Now, quality is a given. Responsiveness has taken its place. The Australia/New Zealand supply chain faces a new supply chain challenge: how to maintain cost control (and profitability) and, at the same time, meet new demands for service and flexibility.

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Abstract

Supply chains in Australia/New Zealand (ANZ) and Europe are much more focused on responsiveness. The United States and Japan, meanwhile, have maintained their focus on profitability. In addition, the ANZ supply chain is being tasked with ongoing cost reduction, hence the new supply chain challenge: how to maintain cost control (and profitability) and, at the same time, meet new demands for service and flexibility.

The answer to this challenge is being refined in boardrooms, factories and distribution centres across ANZ. By comparing survey results from ANZ and Europe with those from the United States and Japan, it is clear that responsiveness is leading to an increased focus on:

  • Customer-driven planning - synchronising supply, managing demand
  • Effective order fulfilment through realtime order processing and logistics excellence, as measured by the "perfect order"
  • Correctly identifying customer needs during product development; as well as managing product introduction to deliver the "perfect product launch"
  • Procurement opportunities through global strategic sourcing and supplier collaboration.

What are the leaders doing?

The top supply chains appear to have a common trait: the ability to respond quickly to shifts in demand with innovative products and services, enabled by responsive processes and systems. These supply chains are better able to meet cost, responsiveness and profitability objectives, by developing supply chain models that are strategically driven and aligned to their business environment (including products, markets, suppliers and customers). They are also consistently measuring their supply chain performance based on key indicators, such as:

  • Perfect order attainment
  • Demand management accuracy
  • Time-to-market
  • Cash-to-cash cycle time
  • Supply chain cost.

Over to you

Delivering on cost and profitability can be hard. Adding responsiveness may be harder. The chances are that if your company is not already facing these challenges, it will soon. This report presents the supply chain management progress of ANZ respondents as a whole and of the leaders in particular.

To read the full report, download the PDF file at the top of this page.

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About the authors
iTom Sherlock
Tom Sherlock is a Managing Consultant in the Australian Supply Chain Management Practice, IBM Business Consulting Services.
iMatina Zervos
Matina Zervos is a Senior Consultant in the Australian Supply Chain Management Practice, IBM Business Consulting Services.
iKaren Butner
Karen Butner is the Global Supply Chain Management Leader for the IBM Institute for Business Value, and an Associate Partner in IBM Business Consulting Services in the United States.
iDietmar Geuder
Dietmar Geuder is a Senior Consultant within the IBM Institute for Business Value Supply Chain Management Team.
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