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Asian companies prefer to outsource SCM

A new study indicates that more business leaders in Asia have turned to outsourcing their supply chain management, compared to those in the United States and Europe.

Almost three times more business leaders in the Asia-Pacific region, compared to those in the United States and Europe, say they have turned to outsourcing their supply chain management (SCM).

According to a new study conducted by Harris Interactive, on behalf of logistics company UPS, the online survey polled more than 100 business executives who had attended conferences co-sponsored by UPS, in the U.S. states of Chicago, New York City and Shanghai, China.

About 29 percent of the Asian executives indicated they had moved "very extensively" or "completely" to outsourcing their SCM operations. In contrast, only 11 percent of U.S. and European executives had done likewise. Only 9 percent of Asian executives rated their use of supply chain outsourcing as "not extensive at all", compared to 27 percent of U.S. and European business leaders who chose this response.

Even their objectives in building a supply chain differ. While 23 percent of the Asian respondents rated "improve product cost" as their number one goal, only 7 percent of their U.S and European counterparts felt the same.

Said Mike Eskew, UPS chairman and CEO, in a media statement: "Asian business leaders clearly understand that effective SCM addresses a number of strategic issues and can be a competitive differentiator.

"They also appear much more willing to turn to outside supply chain service providers, while focusing instead on their core competencies."

But, all the executives--regardless of location--did agree on one thing: that the most common problem with SCM right now is "difficulty (in getting) accurately forecasting demand". Some 77 percent of the Asian respondents and 76 percent of U.S. and European respondents listed this as a problem.

"The most commonly cited problem in effective supply chain management is forecasting," noted Eskew. "And overwhelmingly, these executives understand that collaboration between customers, vendors and suppliers, is key (to addressing this issue). We believe technology can solve these problems when it's backed by a trusted partner with the necessary intellectual capital and experience."