Supply chain strategy a key focus as economic crisis bites

South Africa’s business leaders are taking a mature and sober approach to the global economic crisis, focusing on longer-term strategic shifts to make their businesses more sustainable. This was one of the findings of the 2009 supplychainforesight research study. According to Johan Dekker, divisional director: consulting and software for Barloworld Logistics, local CEOs and supply chain executives are committed to cost reduction and managing the risk of holding too much inventory. “Quite surprisingly it would seem that putting supply chain strategy on the boardroom agenda is a key area of focus,” said Dekker. “Aligning the supply chain with the business strategy is a move on which supplychainforesight focused strongly last year. We suggested then that those businesses that had mastered the strategic deployment of their supply chains to earn competitive advantage in a complex global trading environment were more likely to have supply chain strategy on the boardroom agenda. In the research report of 2007, a focus on the positive trajectory of global expansion and growth meant that the alignment of strategy was relatively low on the objectives priority list. Now that an urgent economic imperative exists, it seems that alignment between the business and supply chain strategies has at last become seriously significant – better late than never!” A major objective for the year, identified by the research, is leaner and more efficient supply chains. “If we compare this to previous years’ research it is clear that the economic crisis has had an impact and changed the focus of businesses.” Dekker said in 2008 a key objective was service delivery, while in 2009 it did not even make the top five list, while cost cutting and inventory management were the buzzwords in the 2009 survey. “We are seeing that companies have realised the importance of aligning their supply chain strategy with business strategy.” Other findings of the research were that many companies were no longer looking at global supply sources, but rather investigating the flexibility and responsiveness of their supply chains at home.