1

  Amárach Research, in partnership with Accenture, has surveyed 150 senior Irish executives with responsibility for supply chain management and strategy in their organisations.

  The survey was conducted online, in February 2012.

  The sample represented a cross-section of Irish medium and large-sized businesses, Irish and foreign owned, exporters and domestic operations.

  Those responsible for supply chain management are optimistic about the future, but also realistic about the risks and rewards that lie ahead.

  This report summarises the main findings from the survey.

3

Not Strategic

  Supply chain strategy is integrated into business strategy in the majority of businesses surveyed in Ireland

  Similar percentage in US survey in 2010

  Nevertheless, one in five do not have a supply chain strategy

  The biggest gap is between Irish-owned and foreign-owned companies: 3 in 10 of the former don’t have a strategy, falling to just 4% of the latter Q. To what extent is your supply chain strategy integrated

into your overall business?

60%

12% 9% 19%

Supply Chain (SC) strategy is integrated into our business

strategy

SC strategy is left to individual

business divisions rather than centralised

We're in the process of

developing a supply chain

strategy

We don't have a supply chain

strategy

Integration Into Strategy

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Fuelling Inflation

  With oil prices (in euro) back to their pre-recession peak, it is not surprising to see fuel costs top the list of cost pressures for Irish supply chain managers

  Transport costs are a particular feature of fuel costs, and this is a growing issue for exporters who need to ship bulk freight via sea transportation in particular

  The fact that staff costs are the second highest pressure point should also be a cause for concern, given the labour market changes that have already occurred.

Q. Thinking about costs, which of the following sources of supply chain cost pressures are you experiencing in your business right now?

65%

46% 41%

32% 31%

21%

Fuel costs Staff costs Raw material

costs

Exchange Costs

Other Operating

Costs

Finance costs

Cost Pressures

5

Unsustainable?

Q. Sustainability is a key concern for many businesses, due to environmental, energy and regulatory trends. In your opinion, to what extent do you have a sustainable supply chain, on a scale of 1 to 7, where 1 is completely unsustainable and 7 is entirely sustainable?

4% 6%

14%

27% 30%

13%

4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

1 Completely Unsustainable

2 3 4 5 6 7 Completely Sustainable

Sustainability of Supply Chain

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Looking Ahead

Q. What aspect of sustainability will present the biggest challenge to your supply chain practices in the next 1-2 years?

7

Taking Control

  After last year’s shock to global supplies from Japan, it is perhaps not surprising to see managers widening the range of suppliers they use

  In addition, the majority have conducted detailed risk appraisals to determine which parts of the supply chain are especially vulnerable

  BPO has been adopted by a third of managers in order to strengthen the resilience of their supply chain.

Q. Which of the following have you done in order to minimize supply chain risk for your organisation in the past twelve months?

69%

52%

33%

20%

18%

Established relations with other suppliers to ensure continuity of

supply

Conducted detailed risk appraisals of key suppliers/parts

of supply chain

Used business process outsourcing to reduce potential

risks

Used hedging to mitigate finance/exchange rate risks

Reinforced key elements of your digital supply chain

Taking Control

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Vulnerability

Q. In your opinion, typically how vulnerable is the supply chain of companies based in Ireland, on a scale of 1 to 7, where 1 is extremely vulnerable and 7 is not vulnerable at all?

7% 11%

34% 36%

10%

4% 0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

1 Extremely Vulnerable

2 3 4 5 6 7 Not Vulnerable At

All

Vulnerability of Supply Chain

9

Looking Ahead

Q. What do you consider to be the main supply chain opportunities for your organisation in the next 1-2 years?

10

Supply Chain Island

Q. What do you consider to be the main supply chain opportunities for your IRELAND in the next 1-2 years?

  Supply chain managers in Ireland are facing renewed pressures from multiple sources, especially energy/transport.

  Nevertheless, they have already taken extensive measures to mitigate some of the potential threat from disruption – though vulnerabilities remain: including those relating to sustainability.

  Despite the challenges many have faced in recent years, Irish supply chain managers are confident about the difference they can make to the future success of their businesses – and to the future success of the country.

Call us on 01 410 5200 if you want your business to bounce forward to success:

Gerard O’Neill Chairman

for a confidential discussion about your needs and to explore how we can help you succeed through world

class market research.

e. gerard.oneill@amarach.com w. www.amarach.com

b. www.amarach.com/blog t. twitter.com/AmarachResearch