Financial Rewards from Superior Supply Chain Capabilities – Deloitte 2014 Survey

It may be no surprise that supply chains are becoming ever more complex systems to manage. For any given business, this represents a challenge but also, potentially, a source of advantage. When something becomes harder to manage, the returns to managing it well are heightened. In the midst of this treacherous landscape, some businesses are identified as supply chain followers, while others are distinguishing themselves as supply chain leaders. Which are you?

We surveyed more than 400 executives in manufacturing and retail across the globe and found that organizations with superior supply chain capabilities demonstrate significantly above average performance on both revenue growth and EBIT measures when compared to industry average:

  • 79 percent of organizations with superior supply chain capabilities (“supply chain leaders”) achieve revenue growth that is significantly above average
  • Only 8 percent of the organizations with lower performing supply chains (“supply chain followers”) have above-average revenue growth
  • 69 percent of supply chain leaders have an EBIT margin that is significantly above average compared to only nine percent of supply chain followers

Several qualities separate leaders from followers. Supply chain Leaders are more likely to:

  • Recognize the importance of innovation
    96 percent identify innovation as “extremely important” to growth (vs. 65 percent of followers)
  • Be early adopters of disruptive technologies such as 3D-Printing
    48 percent of leaders use 3D-Printing “extensively” (vs. 13 percent of supply chain followers)
  • Use analytics extensively
    75 percent of leaders utilize optimization software (vs. 34 percent of followers), visualization software (67 percent vs. 28 percent), mobile technologies (75 percent vs. 30 percent) and radio frequency identification tags (65 percent vs. 27 percent)
  • Empower executive level leadership
    56 percent of supply chain leaders have a senior executive heading their supply chain function, compared to just one–third of supply chain followers
  • Connect the organization
    Roughly 50 percent of SC leaders own all of the six “links” frequently associated with supply chain management – product development, demand planning, supply planning, sourcing and procurement, manufacturing and logistics and distribution
  • Develop talent strategies
    88 percent are more likely to actively recruit supply chain professionals with analytics expertise and cross-functional experience and 83 percent are more likely to recruit those with global experience  read more…
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