• 85% of organisations surveyed have already implemented, or are planning to implement, initiatives to improve the supply chain management process; and

• More than 70% of organisations implementing improvements in supply chain management solutions cited either a ‘good’ or ‘excellent’ rating for those initiatives.

According to Mr Charles Agee, IBM’s Manager of Marketing Small & Medium Business Australia & New Zealand, the results indicate supply chain management issues are high on the business agenda.

"Industry is realising that supply chain decisions have the potential to significantly impact on a business’s overall success, through reducing costs, improving customer service, and potentially through increasing revenues," Mr Agee said. "Consequently, many of these decisions are customer led, and are being made at Managing Director and Chief Executive Officer levels. But the businesses to reap the greatest advantages will be the ones who make strategic, rather than tactical or reactive decisions affecting their business processes."

Heather Ridout, Executive Director of Public Policy & Communications at the Australian Industry Group said the report confirms that many organisations are taking advantage of the benefits offered by e-business and the Internet to enable real supply chain improvements. "It also clearly demonstrates that the concept of a networked economy is quickly becoming a reality," she said.

"The report shows that many businesses are already working in collaborative e-mail environments, and many are also using e-commerce to improve procurement, logistics and ordering processes, with customers and suppliers over the Internet," said Mrs Ridout.

The report identifies that a large segment (50%) of the industrial community is yet to fully appreciate the benefits of an integrated supply chain management initiative which embraces available Internet technologies.

The report also reveals:

• Many businesses still perceive that business confidentiality may be at risk; and

• That business-to-business e-commerce is driving business process changes across the range of business functions, including finance, forecasting, and marketing.

"All businesses, regardless of size, that are slow to implement e-business processes - particularly extranet technologies - into their supply chains, face the real risk of becoming increasingly marginalised by more progressive competitors," Mr Agee said.

Although a significant proportion of those surveyed (47%) indicated uncertainty about who to turn to for delivery of a supply chain management solution, respondents were able to identify the specific criteria they would look for in a technology partner.

"Organisations surveyed said that they are looking for partners who have demonstrated their ability to advise, implement, and deliver solutions. These partners must also have a relevant track record, and a flexible, customer-oriented approach," Mr Agee said.

Survey respondents identified the key benefits behind supply chain management to be:

• reduction of inventory levels (42% of respondents),

• reduction of distribution costs (26% of respondents),

• improved customer satisfaction and service (23% of respondents),

• improving delivery reliability (22% of respondents), and

• reduction of administrative costs (18% of respondents).