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Volume 27, Issue 3

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July 18, 2014

The challenge of supply chain management

38% of executives claim that supply chain management is their main challenge over the coming year with 42% placing it at the top of their list for increased investment. Those were some of the findings of a study carried out by the Consumer Goods Forum and KPMG International. The figures were even higher for those in the retail sector with over half (51%) of non-food retailers citing supply chain management as their main challenge.

The annual Global Top of Mind survey, a poll of nearly 500 C-suite and senior executives across 32 countries, also revealed how important the digital revolution will be over the next 12 months to consumer goods and retail companies – impacting everything from business growth and supply chain management to food safety, sustainability, and data security and privacy.

Supply chains are becoming longer and more complex with many factors coming into play such as infrastructure and weather - a lot of data needs to be processed in order to make sure they are fully optimised. As the complexity increases however, so does the possibility of disruption.

It is easy to see why supply chain management is an issue when you look at the most recent BCI Supply Chain Resilience Report. This report highlighted that 75% of respondents did not have full visibility over their supply chain and that 75% experienced at least one supply chain disruption over the last year with 42% of these disruptions occurring below the tier one supplier. 15% of respondents experienced disruptions that cost in excess of €1 million and 9% experienced a single disruption that cost in excess of €1 million.

The study concludes that as supply chains become increasingly complex, greater collaboration among suppliers and retailers is needed. Companies need to achieve greater visibility beyond their tier one and two suppliers and that downstream supply chains also need to be more transparent and agile.

The 2014 BCI Supply Chain Resilience Survey is currently live and can be completed by clicking here.