Retailers that survived the Great Recession by cutting costs now see their supply chains as vehicles for growth as well as savings, according to a survey of 175 supply chain managers.
“The strategic emphasis has shifted from last year’s focus on cost control to a more balanced perspective between cost and service and revenue growth,” said Casey Chroust, executive vice president of the Retail Industry Leaders Association, which conducted the second annual “State of the Retail Supply Chain” study with a team of Auburn University professors led by Brian Gibson.
Chroust said that when last year’s survey was conducted, “retailers were focused on stopping the bleeding” and reducing losses by cutting costs at every turn. With the economy improving, retailers and their supply chain organizations are taking a broader view of their role. “They’re really focusing on growth-oriented supply chain issues,” he said.
By The Numbers: U.S. Retail Inventory to Sales Ratio.
“The results are a sharp contrast from the 2009 survey when infrastructure, rates and people issues were the least of the executives’ worries. The sentiment has shifted from a survival model to a vision of future growth opportunities,” the study found.
One sign of that is renewed emphasis on infrastructure capacity, the survey found. Gibson said the issue of infrastructure capacity was pushed to the back burner when the recession cut into freight volume. “Now it’s starting to come back to the forefront because not a lot was done about it during 2008-2009,” he said.
The study also found increased recognition by retail CEOs of the importance of supply chain management. Eighty-four percent of survey respondents agreed that their CEOs recognize the role of supply chains in their companies’ success. Fifty-five percent said their top supply chain officer reports to the CEO. Thirty-four percent report to a chief operating or financial officer or other senior executive.
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