If it’s any consolation to American supply chain managers, while U.S. companies are looking to Asia for sourcing and manufacturing, Asian companies are looking westward for supply chain expertise. By a margin of almost 3-to-1 compared to their counterparts in the U.S. and Europe, business leaders in Asia are turning to outside experts to manage their supply chains, according to a survey conducted by Harris Interactive and sponsored by UPS.
Having embraced the outsourcing of supply chain management, the Asian business leaders are much less likely to view "customer loyalty" as a business problem. Some 14% of the U.S. and European executives surveyed listed "customer loyalty" as the most important business issue they face compared to only 2% of the Asian executives. The latter say a much more important business issue facing them is "expanding to new markets."
In discussing their embrace of outside expertise in running supply chains, a full 29% of the Asian executives say they have moved "very extensively" or "completely" to outsourcing. In contrast, only 11% of the U.S. and European executives have gone so far. In fact, some 27% of the U.S. and European business leaders say their embrace of supply chain outsourcing is "not extensive at all." The corresponding number for Asian executives was just 9%.
The survey results suggest that executives who have made the leap to reliance on outside supply chain partners are able to focus on a different set of business problems and challenges. For example, when asked what was the most important business issue facing their company today, all executives surveyed were most likely to mention "revenue growth." But then they diverged sharply. While the Asians next focused on "expanding to new markets," the U.S. and European executives focused on "profitability."
On another question, some 7% of the U.S. and European executives say their No. 1 supply chain objective is to "improve working capital." Not a single Asian executive surveyed see that as their No. 1 problem.
Similarly, a surprising 23% of the Asian respondents say their No. 1 supply chain objective is to "improve product cost," while only 7% of the U.S. and European executives rank this objective as high.
There is one topic on which all the executives, regardless of location, agree: Whether you manage your own supply chain or rely on outside expertise, the most common problem with supply chain management right now is "difficulty accurately forecasting demand." Some 77% of the Asian leaders list this as a problem, just as did 76% of the U.S. and European leaders.
Almost three-quarters of the Asian executives view China not only as a "very" or "extremely important" source of manufacturing (71%) but also as a "very" or "extremely important" domestic market opportunity (72%).
