By Drew Wilson Courtesy of EE Times Europe (08/18/2008 12:40 AM EST)

BERLIN — Supply chain risk has increased sharply in the past five years, but supply chain management isn't keeping pace, according to a survey of global executives by the McKinsey Quarterly.

The survey, which received responses from 273 executives around the world, was conducted in June 2008.

Executives cited main supply chain risks as the increasing complexity of products and services, rising energy prices, and financial volatility.

But the majority of survey respondents said that their companies aren't meeting strategic supply chain management goals, "and relatively few have acted on the global trends with the most influence over supply chains," the survey indicated.

In addition, executives "do not express confidence that their companies are reducing costs, improving customer service, and getting products to market faster," according to the survey.

The survey also noted some trends. Most companies tend to manage their supply chains centrally, not locally—a trend that has increased over the past five years.

"When possible, companies seek to maximize economies of scale in the supply chain, and many companies treat it as a shared utility of the broader organization—not only to take advantage of synergies, but also to strengthen their operational expertise."

But environmental concerns, particularly a company's carbon footprint, are not yet major strategic considerations for supply chains.

"That will probably change," according to McKinsey. "Trade-offs between emissions and profitability may lead companies to explore new kinds of supplier relationships, including the transfer of best practices to supply chain partners."

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