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2010

2012Global Supply Chain Trends


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About the Survey Largest survey by PRTM

Global survey

Insight into management efforts to recover from the crisis

Online questionnaire and interviews

To capture the current trends and anticipated challenges

& opportunities


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Survey Participants Size of Companies by Revenue 2009

>$5B 36%

$1B $5B 25% $500M $1B 11%

$100M $500M 15%


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Geographic Distribution

Europe 43%

Americas 30%

Asia 28%


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Industry Affiliation

Electronics & Telecommunications 26%

Automotive, Aerospace & Industrial 23%

Consumer Goods 17%

Health Care 11%

Logistics 8%

Other 15%


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Executive Summary Supply chain for companies across globe in

2008&2009

Belief of the surveyed companies & optimism

Gross Margin Expectation of Survey Participants byRegion

Americans 5.3%

Europe 10.4%

Asia 12.9% Findings of the survey about the supply chains for

companies


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The degree to which companies can capture benefit from

an eventual upturn will depend largely on how they deal

with

five key supply chain challenges


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Trend 1

Supply Chain Volatility and

Uncertainty Have PermanentlyIncreased

Market transparency and greater price sensitivity

have led to lower customer loyalty. Product

commoditization reduces true differentiation in the

consumer and B2B environments.


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74%

33%

31%

30%

28%

24%

23%

19%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Demand volatility and/ or poor forecast accuracy

Lack of visibility to current market demand

Increasingly demanding customers

Lack of intergration between supply chain and product development

Management focus on cash flow and margin

Inability to make fast decisions in response to market changes

Poor supplier performance

Management focus on moving to a lower cost supply base

Series1

Top Challanges to Supply Chain Flexibility


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Reasons For The Volatility

Recession

Decrease in the Customer Loyality

Lack of robust forecasting and planning tools


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Steps Taken To Counter The Volatility

Improve supply chain response time and visibility among

the chain partners

Deepening collaboration with key customers

real-time planning with their key customers Develop processes for improved demand sensing


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Uptick in Globalization Increase in complexities of

Supply chain.

Decline in the complexities with regards to the # of

manufacturing facilities.

30% of decline in the suppliers.

Regionally configured supply chains will be the key tosuccess.

P&G End to End Supply Chain management.

Trend 2


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Trend 3

Market Dynamics Demand Regional, Cost-Optimized Supply

Chain Configurations.

Downturn of economy lead to reduction in cost and the gross

margin.

Concept of outsourcing.

Reduction in gross margin lead to reduction in supply chain.

Company preferred cheap suppliers

Hidden cost (quality, site visits, loss of flexibility.)


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Risk and opportunity management shouldspan the entire supply chain

Trend 4


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Companies fears:-

suppliers would be forced into default, cutting off

critical sources of components and increasing the

cost of introducing

alternative suppliers


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Companies are taking an end-to-end

approach in managing risk at each node of thesupply

Chain by:-

Demand planning

Limiting the complexity of the products

Mitigating inventory related risks


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BMW Motored, a global manufacturer

of motorcycles


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Supplier selection

strategy to optimize the supplier Portfolio

BMWs supplier risk management

approach is part of a comprehensive

supplier management strategy is fully integratedand managed through pre-determined KPIs

Result:-

significantlyimproved the quality of delivered

components by suppliers.


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Are existing supply chain

organizations truly integrated

and empowered??

Trend 5


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Lack of integration between supply

chain functions like manufacturingand product development.

Inability to make quick decisions


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EL-AJOU group (Office automation &Medical equipment)


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Lack of professionals in thedomain of supply chain

Cost cutting and budgetrestrictions

Third party logistics providers asan alternate


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All functions of the Supply chain as a

single resource under one joint

responsibility

Focus on finding and training toptalent


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Queries?

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