Economic Pressures Turning Companies to Supply Chains for Revenue Gains and Cost...

Economic Pressures Turning Companies to Supply Chains for Revenue Gains and
Cost Savings
Supply Chain Management Advancing as Counter-Cyclical Tool

FALLS CHURCH, Va., Sept. 17 /PRNewswire/ -- Economic pressures are forcing
companies to employ their supply chains, primarily the sourcing and
procurement functions, to contain costs and boost revenue, according to the
2009 Global Survey of Supply Chain Progress from CSC (NYSE: CSC), Supply Chain
Management Review, the Council of Supply Chain Management Professionals
(CSCMP) and Michigan State University (MSU).

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The survey, completed by supply chain executives representing more than 20
industries and every major geographical segment of the world, shows the extent
to which the economy has impacted the supply management function. Survey
respondents cited an immediate need to cut costs as the top economic pressure
on their supply chains. An overwhelming 88 percent of respondents have set
objectives for purchasing to generate cost savings in the next 12 months. This
enhanced focus on supply chain management (SCM) demonstrates its use as a
counter-cyclical tool for improved business performance.

"The global economic downturn has impacted every aspect of business
operations, and supply chain is no exception," said Chuck Poirier, author of
several books on SCM and a partner in CSC's Global Business Solutions and
Services group, who has helped analyze survey results for the last seven
years. "In the face of a renewed focus on cost reduction, supply chain
management continues to show a positive impact on business performance. During
the past year companies have turned to their supply chains to cut costs and
grow revenues. To a large degree, the supply chain has delivered, helping
companies get through some tough times."

The survey shows 33 percent of respondents indicate they leveraged supply
chain initiatives to reduce costs between one to five percent in the last
three years. Twenty-seven percent report realizing even higher cost
reductions, ranging from six to 10 percent. "These results were comparable to
last year's," said Poirier. "However, the most significant improvement over
2008 was in the number of respondents who reported no impact - or did not know
the impact - of supply chain initiatives on costs. That number dropped
significantly, from 22 percent in 2008 to 13 percent in this year's survey."

In spite of the difficult economy, 32 percent of respondents saw their
revenues increase between one to five percent in the past three years as a
result of supply chain initiatives, while another 24 percent identified
revenue increases in the six to 10 percent range.

"That's a total of 56 percent, a significant number given the current
downturn," noted Poirier. "We see this trend as evidence of the fact that
supply chain is finally becoming entrenched as a company-wide improvement
effort. Leaders are implementing strategic supply chain efforts to transform
business processes to achieve near-optimum operating conditions. At the same
time, most firms identified as followers and laggards have not reached the
limit of what can be done to enhance financial performance with their supply
chains."

While a majority of respondents indicate they are already using their supply
chain to trim logistics costs, source more strategically and generate
additional savings by leveraging the purchasing function, companies that are
considered supply chain leaders are going a step further: accelerating revenue
generation by integrating the supply chain organization with key internal
groups such as finance, IT and product development. "The leaders, in short,
understand the central role supply chain management can play in the company's
business success and are playing that role to the fullest," said Poirier.

For the first time, this year's survey included questions about supply chain
sustainability and green initiatives. Eighty-seven percent of respondents
report they are either evaluating or implementing options related to supply
chain sustainability; just under half of those have already implemented such
initiatives. Sixty-two percent report paying more attention to
green/sustainability issues today than they were 18 months ago.

"This is encouraging because it suggests that sustainability and green issues
will be dominant elements in future supply chain efforts," said Poirier. "At
the same time, there's little in the survey results to show that revenues for
such initiatives have actually been increased; in fact, we saw evidence that
economic conditions have pushed green to a lower priority. Hopefully, that
will be a short-term move."

The 2009 survey was completed by 176 respondents from both large and mid-sized
companies. Fifty-three percent of the firms indicated their size as $1 billion
or more in annual sales, while revenues of the remaining companies ranged from
$250 million to $1 billion.

The survey report, which includes the complete set of questions and responses,
and an executive summary, can be found at www.csc.com/2009SCSurvey.

About CSC
CSC is a global leader in providing technology-enabled solutions and services
through three primary lines of business. These include Business Solutions and
Services, the Managed Services Sector and the North American Public Sector.
CSC's advanced capabilities include systems design and integration,
information technology and business process outsourcing, applications software
development, Web and application hosting, mission support and management
consulting. Headquartered in Falls Church, Va., CSC has approximately 92,000
employees and reported revenue of $16.2 billion for the 12 months ended July
3, 2009. For more information, visit the company's Web site at www.csc.com.

SOURCE CSC

Janet Herin, Sr. Manager, Media Relations Corporate of CSC, +1-310-615-1693,
jherin@csc.com