Bob Ferrari over at Supply Chain Matters has a new post citing research from PRTM.  In his post, he states “Interestingly, PRTM concludes from the data that the COO agenda across industries and geographies is on improving supply chain flexibility and performance, and by 2010, the need for greater supply chain flexibility will overtake product quality and customer service as the major driver for improving supply chain strategy.  I respectfully disagree.”

I posted a comment on his site and have included it here as well.

** My comment **

Bob – I have not had a change to review the PRTM study yet, but I can see how they could draw that conclusion just based on the facts that I’m seeing.  I say this because I think companies are going to be extremely quick to jump on the quality issues given the huge impact it has on their brand in an increasingly competitive global market.

It is also precisely for these reasons – expectation that they will jump on and fix quality quickly and the increasing global competition – that I believe that their observation may be on the mark. 

What I continue to see is that globalization and outsourcing have opened up new markets critical to increasing growth but have simultaneously added significant complexities.  I’m seeing a growing awareness by executives about the strategic role a responsive supply chain can play in terms of market growth, customer service/satisfaction and operations performance.

Everyone I talk to agrees that things are moving at unprecedented speed, things are changing rapidly on all dimensions.  It used to be that you could win from a supply chain perspective by simply building a great plan and out executing the competition.  That is no longer sufficient.  While you still need a plan and excellent execution capabilities, you have to be able to out-respond your competitors.

This means your company must be prepared to deal with the unexpected every day – because increasingly things are going according to plan.  This could even include a product quality issue and a host of other unplanned events.  If the company isn’t able to excel at dealing with these unplanned events, the risk is a significant market and margin erosion problem as the market has demonstrated no patience for manufacturers that can’t turn on a dime to deal with quality issues, demand fluctuations, supply disruptions, etc.

I think in this context the PRTM conclusions may be on the mark.

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