With supply chain management, businesses most concerned with cost, KPMG survey says

Accounting giant KPMG recently released a survey it conducted of 200 senior-level executives from North American, West Europe and Asia-Pacific on supply chain dynamics resulting from economic uncertainty and while the results are varied, they show that business costs most often drive their supply chain decisions.

According to the survey, 66 percent of respondents affirm that cost most guides their supply chain decisions. However, 63 percent also assert that more attention should be given to the non-financial facets of the supply chain, and 38 percent say that a focus on costs has actually hurt their relationships with suppliers.

The survey found that 35 percent cite China as the most common sourcing location, followed closely by India at 26 percent. Nonetheless, many businesses are looking to streamline their supply chains in the coming years, taking into account geographical locations and market dynamics in their future supply chain decisions.

In the report, KPMG says that businesses are also beginning to collaborate more willingly with suppliers as they move to bring down costs while simultaneously improving efficiency: Nearly 50 percent of respondents aver that they will work more closely with their suppliers to bring about more product innovations, research and development and business cost reductions.

While the report says that the financial collapse of the past three years brought headaches to supply chain management, those same conditions have helped businesses to develop more efficient supply chain practices. Andrew Williams, the Asia-Pacific Head of Diversified Industrials for KPMR, affirms: "The financial crisis dealt a blow that sent shockwaves through the industry, but those same forces are the catalysts that are helping organisations create more dynamic, resilient and responsive supply chains."