Study shows growing importance of supply chain coordination
Frost & Sullivan has come out with a new research report entitled “World Supply Chain Management Software and Services Markets” that identifies the growing importance of supply chain coordination (see more complete description of the report here).
According to the report, “The Supply Chain Coordination (SCC) segment is expected to play a key role in the near future as event management and performance management applications emerge as the competitive tools in managing the highly complex supply chains, by reducing the lead time and cost. These applications help companies detect, diagnose, and resolve performance exceptions before they become expensive problems. Currently, customer satisfaction plays a significant role in the business environment.”
The report also says “Overall, the SCC segment is expected to grow at a faster rate than the planning and execution segments during 2007-2013.”
This issue of coordination is directly in-line with the need for Response Management. I would argue that the main reason companies need to coordinate their supply chains is to coordinate response to change. With growing demand volatilty, shortening product lifecycles and increasingly global supply networks, the need to coordinate an effective response to change has become the new operating imperative. Failure to do so effectively can lead to poor customer satisfaction (and, ultimately revenue loss) and declining operating performance as inefficiencies erode margins and bloat inventories.
We are certainly seeing a growing awareness for the critical impact that poor response to change can have. This report, combined with the comments of Steve Hochman at AMR Research in his recent report, continue to validate the growing need for Response Management to cope with today’s manufacturing complexities.
