End users unhappy with supply chain
By Staff -- Industrial Distribution, 12/1/1998
New York, N.Y.--Only one percent of manufacturers rate their supply chain as "world class," a survey of nearly 200 large North American firms reports.Just a third of the companies surveyed by Deloitte & Touche Consulting Group feel their supply chain performance tops the industry average. But most of those firms are investing in measures to address key problems such as integrating information systems with distributors, the survey reports.
"If companies want to provide timely customer service and manage their costs, initiatives such as strategic partnerships, systems improvement and information sharing are all critical to their competitive success," says Ron Factor a partner at Deloitte Consulting. "After all, companies do not compete with companies. Instead, supply chains compete with supply chains."
About half of the firms surveyed report at least $1 billion in annual revenues and at least 2,500 employees. Among the highlights:
* Three-quarters of respondents expressed dissatisfaction with the information systems they use. Many firms report having problems integrating their systems to efficiently share information between business partners.
* Improving information systems is expected to be the most important initiative among supply chain managers (4.2 on a 1-5 scale).
* Three quarters of respondents plan to increase their supply chain systems budgets and about one-quarter of those anticipate spending hikes beyond 20 percent.
* Sixty-three percent are implementing enterprise resource planning systems. Almost half of the firms surveyed desire a combination of ERP systems and advanced planning software.
* Sixty percent do not have a strategic information systems plan. Only a third of smaller companies (under $1 billion in revenue) have a formal plan that links IT to their business strategy.
* Despite being EDI capable, 73 percent of respondents used EDI for less than one-fifth of their transactions. Within the next two and a half years, the Internet is expected to replace traditional EDI networks.
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