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8 December 2011

Oliver Wight webinar attendees surprised best-in-class service costs less

Senior executives from some of the world’s best known organisations who tuned in to the recent Oliver Wight webinar on supply chain benchmarking were surprised to learn that companies, which provide best in class service do so at half the cost of their peers. A live poll also revealed that most organisations had previously struggled to precisely calculate the benefits of improvement activity.

The poll, conducted during the hour-long live broadcast, revealed that 68 per cent of respondents thought providing higher customer service levels also meant higher supply chain costs. Oliver Wight Partner, Liam Harrington, who co-hosted the webinar with colleague Flavio Pietrocola, says “a lot of people’s paradigm is that ‘if I’m going to improve service I have to have higher inventory levels and so on, which comes at additional cost’, but actually it’s quite the opposite. If your supply chain is more efficient, you hold less inventory and reduce your cash-to-cash cycle etc., which obviously costs you less. In fact the results show that organisations providing best-in-class service can reduce supply chain costs by 50 per cent or more.”

97 per cent of attendees said they believed a high-performing supply chain was strategically important for their organisation, whilst 89 per cent also agreed that their sales and marketing teams would perceive the benefits from benchmarking metrics positively. “Quite often companies consider benchmarking as purely a supply exercise, which the commercial part of the organisation regard as constraining their room for manoeuvre, so it’s very pleasing to see people are now starting to recognise its wider benefits,” says Pietrocola.

The poll also revealed that organisations have previously struggled to precisely calculate the benefits associated with this type of improvement activity. No respondents were ‘always’ able to precisely calculate the benefits, and 28 per cent admitted they have ’never been able to’, with a further 46 per cent answering ‘sometimes’. Harrington says, “It’s likely that most of the remaining 26 per cent (who answered ‘most times’), are those who are already doing some kind of benchmarking activity.”

Over 150 delegates from retail, service and manufacturing organisations all over the world registered for the webinar, entitled ‘You can’t improve what you don’t measure. Supply Chain Benchmarking for success.’ The webinar was broadcast live on 31st October 2011.

Notes to editors