Ernst & Young has released a report, Global Supply Chain: Balancing Cost Reduction and Performance Improvement, which includes responses from 250 supply executives from global companies. Ernst & Young assert that the slower economy demands increased supply chain efficiency. Cost reduction is an essential agenda item for senior executives, explains Ernst & Young, noting that pressure to improve performance originates in profitability, globalization and other factors. Survey results indicate a divide between what executives require of their supply chains and what they see being delivered. More than 60% of respondents report supply chains are expected to play a key role in building credibility with investors by positively impacting the bottom line. Only half of these respondents are confident that their supply chains are capable of managing the business issues associated with this role. The report continues with the statement that cost cutting alone will not provide growth opportunities. Cost reduction efforts succeed less than one-third of the time, Ernst & Young asserts. High-impact initiatives pay off quickly through cost-reduction efforts, and initiatives that optimize and transform the supply chain provide long-term growth and profitability.
