14 February 2011 | Adam Leach

A lack of cross-functional expertise across company departments is the biggest issue preventing supply chain executives transform their supply network in 2011.

That was one of the key findings of research by SCMWorld which surveyed more than 400 supply chain directors. The majority (47.2 per cent) said they believe this to be the case.

The Supply Chain Predictions for 2011 survey, showed a significant proportion of respondents (36.5 per cent) feel their companies are suffering from a ‘business-as-usual’ approach where they prefer to maintain the status quo than pursue innovation and development.

The report said that despite an appreciation of the need for the supply chain to be a customer-focused, collaborative and cross-functional in order to be competitive, this has yet to be achieved.

Despite the recognition of supply chain’s strategic nature, and the fact that supply chain management needs to be a boardroom-driven initiative, “a significant number of organisations still do not appear to genuinely appreciate the role supply chain can play in competitive differentiation”.

More than half consider their key pressure points to be supplier capacity shortage and constraints (50.6 per cent), increasing supply chain complexity (51.0 per cent), rising transportation costs (50.6 per cent), increasing commodity pricing (54.5 per cent), and demand volatility (62.7 per cent).

As the global recession has squeezed budgets and customers have become increasingly price-sensitive, demand has become far more difficult to predict. Manufacturers are unable to react quickly to swinging demand patterns at the other end of the chain.

Priorities for improvement in 2011 reveal that businesses are urgently seeking ways to counter demand volatility. Priorities are customer service (56.4 per cent), inventory optimisation (55.4 per cent), sales and operational planning (44.6 per cent), and supply/demand balancing (43.6 per cent). 

☛ The report is only available to members of SCM World.