20102012 Global Supply Chain Trends

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

Survey Participants
Size of Companies by Revenue 2009

>$5B 36% $1B $5B 25% $500M $1B 11% $100M $500M 15% <$100M 13%

 Geographic Distribution
Europe Americas Asia

43% 30% 28%

 Industry Affiliation
Electronics & Telecommunications

26% Automotive, Aerospace & Industrial 23% Consumer Goods 17% Health Care 11% Logistics 8% Other 15%

Executive Summary
Supply chain for companies across globe in 2008&2009 Belief of the surveyed companies & optimism Gross Margin Expectation of Survey Participants by Region Americans 5.3% Europe 10.4% Asia 12.9% Findings of the survey about the supply chains for companies

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

Trend 1 Supply Chain Volatility and Uncertainty Have Permanently Increased

Market transparency and greater price sensitivity have led to lower customer loyalty. Product commoditization reduces true differentiation in the consumer and B2B environments.

Top Challanges to Supply Chain Flexibility

Management focus on moving to a lower cost supply base

19%

Poor supplier performance

23%

Inability to make fast decisions in response to market changes

24% Series1

Management focus on cash flow and margin

28%

Lack of intergration between supply chain and product development

30%

Increasingly demanding customers

31%

Lack of visibility to current market demand

33%

Demand volatility and/ or poor forecast accuracy 0% 10% 20% 30% 40% 50% 60% 70%

74% 80%

Reasons For The Volatility

Recession Decrease in the Customer Loyality

Lack of robust forecasting and planning tools

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

Trend 2
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 to success. P&G End to End Supply Chain management.

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.)

Trend 4

Risk and opportunity management should span the entire supply chain

Companies fears:suppliers would be forced into default, cutting off critical sources of components and increasing the cost of introducing alternative suppliers

Companies are taking an end-to-end approach in managing risk at each node of the supply Chain by:Demand planning

Limiting the complexity of the products

Mitigating inventory related risks

BMW Motored, a global manufacturer of motorcycles

Supplier selection strategy to optimize the supplier Portfolio BMWs supplier risk management approach is part of a comprehensive supplier management strategy is fully integrated and managed through pre-determined KPIs Result:significantly improved the quality of delivered components by suppliers.

Trend 5

Are existing supply chain organizations truly integrated and empowered??

Lack of integration between supply chain functions like manufacturing and product development.
Inability to make quick decisions

EL-AJOU group (Office automation &

Medical equipment)

Lack of professionals in the domain of supply chain Cost cutting and budget restrictions Third party logistics providers as an alternate

All functions of the Supply chain as a single resource under one joint responsibility Focus on finding and training top talent

Queries?