DAILY NEWS Dec 16, 2013 8:32 PM - 0 comments

New research from MIT "the missing link" connecting logistics skills to corporate KPIs

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2013-12-16

TORONTO, Ont. -- The MIT Forum for Supply Chain Innovation’s recently released research on supply chain and risk management is providing the “missing link” connecting supply chain and logistics skills to corporate KPI’s, according to CITT.

CITT says the study, which examined 209 manufacturers operating in a number of different sectors, adds “pivotal evidence to support the argument that a company’s most important metrics actually hinge on the abilities and expertise of people who are able to run flexible, uninterrupted supply chain and logistics operations—and not the host of other, less controllable factors that often get the attention of management.” 

Previously CITT has shared other research that studied hundreds of companies with global operations and linked corporate performance most closely to uninterrupted supply chain operations. CITT characterizes the new MIT research as the missing link industry needed to prove that profitability and uninterrupted supply chains are more sensitive to people’s professional abilities than anything else.

"Taken together, these studies send businesses a clear message—having the logistics expertise is the biggest factor in a resilient, uninterrupted supply chain, and a resilient supply chain is the biggest factor for profitability," says Catherine Viglas, president of CITT.

The MIT study,published in collaboration with PwC, shows that profitability hinges on people and what they know. The research concluded that supply chain operations were most sensitive to skill set and expertise, a factor well within the control of businesses, not fickle factors such as commodity pricing and fuel costs. Further, MIT and PwC found that the 'companies with mature capabilities in supply chain and risk management do better along all survey dimensions of operational and financial performance than immature companies.'

"The findings should come as great news to businesses who often feel vulnerable to uncontrollable factors," says Viglas. "Supply chain and logistics is often an afterthought for top-level executives because it's relatively invisible until something goes wrong."

If there's ever been a wake-up call to invest in professional development and certification for supply chain and logistics people, this study is it, added  Viglas, citing the study's findings that only 41% of the companies in the study had the mature expertise needed to effectively address incidents and only 9% were described as being fully prepared to manage the disruptions common in today's increasingly complex global supply chain ecosystem.1

The MIT study illustrated that companies with mature supply chain logistics capabilities in place to avoid or manage supply chain interruptions had significant impact on key operating performance indicators, such as:1

  • Total supply chain lead-time variability
  • Total cost
  • Order fulfillment lead time
  • Inventory turns
  • Supply chain assets utilization
  • Total supply chain lead-time
  • Customer service level or fill-rate
  • Sales revenue
  • Market-share
  • Market value

Viglas also noted that that registration for CITTT courses is open until January 10th for the winter semester of specialized logistics and business courses offered online across Canada. Those interested in register should contact:

  • Phone: 416.363.5696 x0. Phone lines will be opened until Friday, January 10th at 5:00pm EST.
  • Fax: 416.363.5698 (download the registration form online at www.citt.ca/register)
  • Email: CITT at info@citt.ca (download the registration form online at www.citt.ca/register)
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