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    Study Names Tesco and P&G Supply Chain's 'Best in Class'

    WATFORD, England -- Tesco and Procter & Gamble are tops when it comes to supply chain, according to a survey of by international food and grocery specialist IGD, based here.

    WATFORD, England -- Tesco and Procter & Gamble are tops when it comes to supply chain, according to a survey of by international food and grocery specialist IGD, based here.

    The survey, which was completed by senior executives from 50 international companies in November 2005, showed the characteristics of a leading retailer to include sales and profit growth, a strong customer focus, an integrated supply chain, a distinct business model, and strong collaborative relationships. In addition to Tesco, other best-in-class retailers include Wal-Mart, Aldi, Lidl, and Ikea.

    The IDG survey-based report, "Managing International Supply Chains," said the characteristics of a leading manufacturer include innovation, effective brand management, speed to market, excellent customer management, and scale and agility of the supply chain. P&G is the most admired manufacturer for its "leading edge and scale," and other best-in-class manufacturers include Dell, Ferrero, and Unilever.

    "Managing International Supply Chains" shows that up to 64 percent of IGD's international survey respondents believed supply chain to be of high strategic importance, and a key element in driving competitive advantage, organizational capabilities, and business integration," said Darran Watkins, senior business analyst, IGD. "Companies have started to challenge more traditional organizational structures, and to integrate logistics, sales, and production functions across markets and geographies."

    It also showed that 60 percent of companies outsource their warehousing, while 70 percent of companies outsource their transport. "By using several different logistics providers, companies are driving efficiencies through contract and performance measurement harmonization, and by reducing the number of operators used," said Watkins.

    Demand planning and forecasting are chief challenges, according to 72 percent of the respondents. Retail packaging and new product introductions were next (each at 54 percent). The report indicated that collaborative planning with the retail customer can help improve on-shelf availability and increase sales.

    The study outlined the issues facing the industry going forward, which it grouped into demand planning and forecasting; cost management; inventory management; customer service; production, warehousing and transport; availability and retail packaging; and data issues and IT improvements.

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