OREANDA-NEWS.  October 12, 2012. Erratic macroeconomic cycles along with disruptions caused by natural disasters have made supply chain management both more difficult and important to business success. To adapt to this dynamic environment, executives are actively managing their supply chains utilising strategic and operational levers at their disposal to transform vulnerabilities into competitive advantage, reported the press-centre of PwC.   

Mark Strom, PwC's Global Operations Leader:
“Leaders are investing in next-generation supply chain capabilities that enhance profitability while meeting the needs of individual customers. Responsive supply-chain configurations not only drive performance, but allow companies to serve their customers seamlessly in turbulent market conditions.”

According to PwC’s Global Supply Chain Survey there are six key findings that speak to leading edge practices:

Supply chain leaders deliver both better than average financial results and customer responsiveness. Leaders enjoy a 2X profitability advantage as compared to laggards, and a 17-point on-time delivery percentage advantage. It starts with recognition of the supply chain as a strategic asset. There is room for improvement—less than half of survey respondents say their companies view the supply chain as a strategic asset.

Leaders focus on best-in-class delivery, cost and flexibility to meet increasingly demanding customer requirements. The two factors that create the highest value are maximising delivery performance and minimizing supply chain cost.

Leaders have a clearly defined go-to-market approach, and 83% of leaders tailor their supply chains to meet the needs of different customer segments. Laggards are more apt to take a ‘one-size-fits-all’ approach with fewer supply chain configurations.

Leaders often outsource production and delivery, but retain global control over core strategic functions such as new product development, sales and operations planning (S&OP) and procurement.

Supply chain leaders in both mature and emerging markets invest heavily in advanced capabilities that differentiate them from their competitors.

Interest in next- generation technologies and sustainability is growing. More than half of survey respondents said they are implementing or plan to implement new tools for process automation or transparency. More than two-thirds think sustainability will play a more prominent role in supply chains in the future.

Supply chain management in Russia

As Russia integrates into the global economy, Russian companies, which work with customers and suppliers all over the world, simply can’t stand on the sidelines when it comes to global trends in supply chain management (SCM). Our companies encounter the same challenges as their foreign competitors: volatile demand, customers' increasingly high expectations when it comes to service, and the supplier's readiness to modify product batch size, as well as the possibility of integrating the customer's and supplier's supply chains. Despite the global experience gained, the lack a clear "blueprint" is becoming quite evident, which means that supply chain management executives increasingly must acquire specialised skills and a wealth of knowledge.

Irina Biryukova, Partner, Consulting Supply Chain Management Group Leader, PwC Russia:
"When all challenges are similar, both successful Russian companies and those that are still trying to find their way on different terms than their foreign colleagues are creating their own SCM agendas. Most Russian respondents note that their company's management usually sees developing supply chain management as an investment in a support function for the company overall. But, some Russian companies view SCM as a powerful tool for creating competitive advantage. One of the specifics of how Russian companies set their priorities is their readiness to first of all invest in implementing the newest IT tools for supply chain management with the expectation that this will lead to a simultaneous change in business processes, skills and overall organisation. Russian companies are also showing interest in the latest computer-aided technologies and mechanisms for processing raw materials and other materials."

Nevertheless, companies aiming for sustainable growth are increasingly including the creation of SCM development strategies that are aligned with their business goals as some of their high-priority initiatives. Russian companies are also starting to look at the possibility of outsourcing part of their SCM processes, especially inventory and transportation logistics. However, industry leaders are consolidating and organisationally centralising strategic supply chain management functions. It won't be long before demands from business partners compel Russian companies to expand their agenda to consider "eco-friendly supply chains," the importance of which their foreign competitors have already recognised.