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Supply chain link to recession survival

Ian Grant

Improved supply chain efficiency was the key to manufacturers' ability to get through the recession, according to a study.

An efficient supply chain was essential to maintaining prices on goods and services and was also the mean to generating new revenues, the global study of supply chain executives from 20 industries found.

Almost 80% said they had sharpened their focus on supply chain management in the last 12 to 24 months.

However, the savings achieved in 2010 were essentially flat or fell off slightly when compared to 2009. In addition, fewer reported revenue increases (47% vs 30%) than in 2009.

"Combined with other responses, these results suggest that most firms are at the bottom of the economic trough and will use their supply chains to keep a lid on costs as they rise out of the downturn," the authors said.

However, supply chain leaders built market share. Some 38% said their shares had gone up, while 23% said they went down.

"The lessons on how businesses survived a serious economic downturn are becoming more evident," said Brad Barton, CSC's supply chain practice leader. "To reduce costs, business leaders went directly to their supply chains, working with key suppliers to reduce cycle times and increase revenues with their best customers."

The study, Global Survey of Supply Chain Progress, was done by IT systems integrator CSC, Supply Chain Management Review, The Eli Broad Graduate School of Management at Michigan State University, with help from The Council of Supply Chain Management Professionals (CSCMP) and Supply Chain Europe magazine.

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