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Procurement Organizations Remain Focused on Cost, Despite Evidence of Negative Consequences

KPMG - A majority of industrial companies continue to focus on cost as their top supply chain management priority, despite emerging evidence that excessive focus on cost damages relationships with strategic partners, and that new supply chain management approaches are gaining hold among leading competitors, according to the findings of a recent KPMG International study. Thirty-eight percent of leading respondents from North America, Western Europe, and Asia-Pacific acknowledged that a focus on cost has harmed supplier relationships. The study found that bellwether companies: develop deeper relationships with strategic suppliers; engage in collaborative innovation; make strategic investments in key suppliers; bring some strategic supply chain elements back in-house; and leverage global and regional supply chain partners to optimize speed, quality, and cost. China continues to present significant IP risk, and strategic relationships with Chinese suppliers of respondents tend to focus on production of goods involving little IP, assembly tasks, and warehousing. (946 words) . . . (to read the remainder of this article, please log in below.)
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