HItachi survey finds managers unappreciative of supply chain
Hitachi Consulting, the global management consulting and IT services business of Hitachi Ltd, has today released a new research analysing the current attitudes of supply chain executives and managers. The survey, which made some concerning discoveries, revealed that 80 percent of supply chain managers do not see their supply chain as an enabler of business strategies within their organisation.
Spanning nine European countries, Hitachi Consulting’s survey aimed to identify the extent to which supply chain management activities and priorities are aligned with a strategic transformation agenda. The survey found that a little over half of the respondents (55 percent) do not regard their business’s supply chain as a fundamental source of business value and competitive advantage and almost a third (29 percent) see it as purely an operational function.
Cathy Johnson, vice president at Hitachi Consulting, said: “These figures are far from reassuring. For the most part, it seems that senior executives understand the strategic importance of the supply chain, yet the managers who deal with the supply chain on a day-to-day basis do not.
“A supply chain that doesn’t support the overarching business strategy, and which doesn’t deliver competitive edge – and which isn’t going to deliver a material change in performance over the next five years – is clearly not a desirable asset.”
Hitachi Consulting’s survey also found that only a third of respondents (33 percent) believed that their organisation’s supply chain would deliver an improved customer experience over the next five years. Almost half (45 percent) of respondents did not believe that their organisation’s supply chain would deliver increased profitability and 46 percent did not believe that their organisation’s supply chain would deliver a reduced working capital requirement. Only 43 percent believed that their organisation’s supply chain would improve sales revenues over next five years.
Greg Kinsey, Vice President of Marketing for the EMEA region at Hitachi Consulting, said: “The results from our survey make one thing very clear: the disconnect between a company’s business transformation strategy and the day-to-day management of the supply chain remains a serious, yet hidden, problem for many organisations.
“Our real concern is the lack of alignment, sense of urgency and change readiness within the operations. This should be a wake-up call for both senior executives and operational managers.”
Hitachi Consulting’s next release will look at the fact that there are too many changing priorities for supply chain executives and how a hierarchical transformation roadmap will better communication at all levels of an organisation.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany