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One-third of companies rely on more than ten supply chains

Written by: Supply Chain Online
Published on: 25 Nov 2016
Category:

MULTIPLE SUPPLY CHAINS

One-third of companies rely on more than ten supply chains

Nearly a third of companies that are large enough to employ supply chain and operations professionals use more than ten supply chains, according to a new report.

A survey conducted by DHL Supply Chain quizzed 350 supply chain professionals from companies based in the five major regions of the world. It found that 31.8 per cent had more than ten supply chains servicing their global operations.

The largest proportion (40.4 per cent) of businesses used between two and five supply chains. Around one in ten (10.7 per cent) had between six and ten, and 17.2 per cent used a single supply chain.

The report on the survey’s findings, entitled The Plug-and-Play Supply Chain: Beyond Efficiency to Growth, suggests that reliance on a large number of supply chains can lead to high costs, waste and reduced agility.

The trend towards multiple supply chains is often a result of mergers and acquisitions and prolonged growth. When combined with the effects of globalisation, this can result in a company that has transformed its business operations but now has supply chains that are complex and underdeveloped.

The report claims that one solution is a “plug and play” approach that can standardise between 70 and 80 per cent of supply chain operations at the centre of a company. Tailored solutions can then be applied to the remaining supply chains, depending on the segment’s particular market needs.

Lisa Harrington, report author and President of the lharrington group (LHG), said: “With a third of businesses operating more than ten supply chains, it’s no wonder that nearly 70 per cent of our survey respondents said they were now actively looking into standardisation solutions to reduce cost, inject agility and streamline operations.

“However, only 16 per cent of businesses believe their standardisation efforts are well underway or complete. This suggests a lack of strategic direction as to what the end result should look like.”