US: Supply chain disruption needs “holistic” approach
Best-in-class companies apply a “holistic” approach to the prospect of supply chain disruption, according to a new report.
In “The Chief Supply Chain Officer’s View of Supply Chain Disruptions: How the Best-In-Class Respond”, consultancy business the Aberdeen Group points out that there is no such thing as the perfect supply chain plan.
However, it advises that, rather than just analysing the root causes of disruption, companies should take steps to offset or mitigate against them, or provide alternatives.
According to the report, 59% of the best-in-class companies rank raw material volatility as the most disruptive event in supply chain processes – compared to just 23% of all other businesses.
Furthermore, their total logistics costs are typically more than 50% less as a percentage of total revenue, and they are 23% more likely to have a chief supply chain officer (CSCO) with a broader scope over their supply chain.
The best-in-class are more than twice as likely to have sustainability initiatives that support improvement of energy efficiency or alternative use of fuels, the report adds.
“Best-in-class companies consider all disruptions as an area to be addressed, whether it is in their immediate control or not, such as raw material volatility,” the report says.
“They understand the need for a holistic view of their supply chain and empower the CSCO with a broader scope than other maturity levels.”
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