Among the findings: more than one-third of the executives acknowledge their companies lack an effective global strategy to fulfill demand, and 34 percent said a poorly designed or executed global strategy has contributed to the failure for growth in emerging markets.
"Close to 40 percent of the executives surveyed knew they had a poorly designed global procurement and manufacturing strategy and really hadn't taken the steps to make investments in processes and technology," said Bill Read, partner at Accenture in the supply chain management practice. "Overall, they were dissatisfied about their global strategy. It's something we had sensed but wanted to prove through research."
Fully 75 percent of the respondents indicated China was the most important emerging market. India was next with 48 percent. The executives admitted they were not prepared to support sales or procurement in these countries.
Accenture's study was based on a survey of 160 sales and marketing, and operations and supply chain management executives from companies in the United States with revenue exceeding $1 billion, as well as executives from 143 companies in Europe with revenue about $500 million. Participants were from industries including manufacturing, retail, media and entertainment.
To get to having a truly global operational model, companies have been advised to increase investments in technology to improve materials sourcing and develop a more integrated strategy. This will increase supply chain visibility throughout the enterprise, said Read. Some businesses have already caught on.
Take Pacific Cycle LLC and Intermec Technologies Corp., for example. Both have firsthand knowledge. Bicycle-maker Pacific Cycle manufacturers million of bicycles, well known U.S. brands from Schwinn to GT to Mongoose, in China each year. Now it's trying to sell it wares there too. "China doesn't have a good IT infrastructure, yet, for communications, so we are trying change that to sell our bicycles there," said Ed Mathews, director of information systems at the $400 million bicycles maker. "We've had a very small office in China for a couple of years to check on production, but this will change."
On Tuesday Intermec Technologies Corp. opened a service center in Shanghai, China to provide local support and repair services for Intermec handheld devices, printers and other products. It's been working to tie together its international operations on an SAP AG platform, too. "We have a project underway to accomplish that, but it won't be complete until sometime in the first half of next year," said Mike Wills, vice president, radio frequency identification technologies and global services at Intermec. "Our sales into China, India and other areas within Asia Pacific trace back several years. The volume of the business grew to a level that we recognized the need for direct product service support."
That direct product support requires increased visibility to move materials around the world more easily, responding quickly to changes in demand. It's become critical for companies whose products are serviced or sold into overseas markets.
(Note: A podcast of the interview with Accenture's Bill Read is available here.)