Mid-size companies missing out on supply chain best practices

Many managers are unaware of the benefits, new study says.

By Staff -- Modern Materials Handling, 9/1/2005

Despite gains made by many of the largest companies using supply chain best practices, mid-size companies, for the most part, are not following suit. This according to Gene Tyndall, founding partner, Supply Chain Executive Advisors, LLC.

He asserts that when working directly with mid-size company managers, they are surprised to hear that supply chain practices executed by larger corporations can be scaled down and made successful at their companies.

"For many such executives, it takes a major external threat such as global competitors entering their markets in order for them to wonder about their supply chains," Tyndall says. "Then, they often do not know where to turn for help."

As a result, few take part in supply chain organizations or network opportunities, resigned to the fact that their operation does not qualify as a major player. Furthermore, they are reluctant to search out the newest supply chain software tools, believing that software suppliers cater their offerings exclusively to bigger operations.

Even for some that have invested in supply chain technologies, many have not seen adequate return on investment (ROI). Most often this is due to a lack of resources – manpower, software and capital, to name three. This has been documented with larger companies, Tyndall explains, but seems to be an even larger problem with smaller companies.

Tyndall adds that although some technology suppliers are tailoring products exclusively for the middle market, most software suppliers are reluctant to offer scaled-down versions of their products. That said, he argues that the primary obstacle still remains the lack of supply chain knowledge among mid-size company managers. Often, he says, management is unaware that the company's supply chain is under-performing or that exemplary supply chain management can lead to substantial cost savings.

"We need to find more channels to help middle market executives help themselves and their companies," he says.