Supply Chain Known and Unknown Impact on Company Cost and Revenue

Jeff Caruso of CSC brought into focus the ability of visibilities’ impact on company supply chain contribution to cost reduction and profit enhancement. Awareness is a valuable attribute.

Caruso indicated that visibility and analytics contribute the most to making a company’s supply chain management a success — and that success translates directly to the company’s growth. Those that have both strong visibility and analytics capabilities are about twice as likely to be in the top 20% of businesses in their category for growth as firms that don’t, according to CSC’s ninth annual Global Survey of Supply Chain Progress, conducted along with Texas Christian University’s Neeley School of Business and Supply Chain Management Review.

“Supply chain has shifted its role from defense and survival last year to contributing to profitable growth,” says Ron Johnson, partner, national supply chain practice at CSC. “Over nine years there has been a steady elevation of supply chain as a strategic entity within the enterprise, versus a back-office transaction component.”

Overall, the survey showed that companies with both high visibility into their supply chain and a high degree of flexibility had higher business growth and higher profits than companies that had only one or the other, or neither. The ideal scenario: have visibility and analytics skills — plus the flexibility to take advantage of both.

Keeping on the top-20% theme, here’s a strategic area to address: 88% of those surveyed indicated their supply chains increased their revenue by less than 20%, with 96% stating their supply chain reduced their operating costs by at least 20%. More telling (or in this case not…), 14% indicated that they couldn’t indicate – they simply didn’t know their supply chain’s impact on cost or revenue. They lacked the necessary visibility to their data to determine underlying opportunities, therefore lost the ability for subsequent actions profit from their findings.

Partnering with an independent freight bill processor with the ability to provide visibility to information, and the cloud-based business intelligence (BI) analytics tools needed to utilize the information to reduce costs/increase profit, is a strategy any company can pursue. And probably should; for most companies these functions are non-core and costly to implement in-house. Instead, utilizing a BI-enabled freight bill processor working in-tandem with supply chain staff will achieve benchmarked information-driven results desired. Additionally, the processor processes, providing thorough shipping billing pre- and post-payment auditing and payment services to eliminate errors in carrier billing and provide centralized payment convenience.

– Tim Nissen, Data2Logistics http://www.data2logistics.com/ + http://twitter.com/Data2Logistics

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