To gain perspective on where supply chain management is today and the direction in which it is evolving, IBM Business Consulting Services completed the 2005 Value Chain Survey in conjunction with IndustryWeek magazine and APQC, a third-party research organization previously known as the American Productivity & Quality Center. This survey identifies current practices, captures significant trends and establishes operational performance benchmarks in five key areas of Supply Chain Management: New Product Development, Supply Chain Planning, Procurement, Logistics and Customer Fulfillment. What do the top-performing supply chains have in common? Top supply chains do have a common trait: the ability to respond quickly to shifts in demand with innovative products and services. To do this, they employ a variety of business strategies and models, coupled with leading management practices. And they consistently measure their performance based on a handful of key indicators: - Perfect order attainment
- Demand accuracy
- Time to value
- Cash-to-cash cycle time
- Supply chain cost.
These indicators of supply chain performance are the gauges used to monitor the efficiency of the business. Leading companies have evolved and transformed their supply chains from static and isolated, to functional, focused operational excellence, to horizontal integration within the company, to external collaboration with partners, and eventually to on demand performance (see Figure 1). Follow the leaders
According to the 2005 Value Chain Benchmarking Study, supply chain executives’ top three objectives remain: - Increased profitability
- Reduced costs
- Improved responsiveness.
To meet these objectives, the leaders understand that supply chain effectiveness must be more than efficiency and low cost—revenue growth and profitability are best achieved by creating an integrated value chain with the ability to condition demand and respond to supply chain shifts with innovative products and services. Many companies are progressing toward the vision of an on demand, customer-driven supply chain—one that is integrated end-to-end across the business and with key customers, partners, suppliers and service providers. The top-performing supply chains are actively transforming their strategies and adopting leading management practices including: - Coordinating business functions across the supply chain
- Developing mutually beneficial ways to strengthen supply chain relationships
- Synchronizing supply and demand through planning and forecasting
- Managing supply chain cycles
- Developing variable cost structures
- Sharing risks with partners
- Using realtime information to create responsive, customer-driven processes.
Complexities in supply chain management are dramatically increased by today's shift toward emerging global markets for material sourcing, manufacturing, distribution and product development. These shifts could introduce further challenges, including potential deterioration of performance. Integration with both internal constituents and external partners such as contract manufacturers or suppliers is now becoming a critical competency. Focusing on global efficiency requires supply chain leaders to get the foundational elements right before addressing this new challenge. 
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