BOSTON--(BUSINESS WIRE)-- Senior management executives are optimistic about economic recovery, but their global operations are ill-prepared to meet a significant upturn in demand, according to a new survey conducted by global management consultancy PRTM. The findings are part of PRTM’s Global Supply Chain Trends 2010–2012 Survey—the largest annual survey of global supply chains ever conducted by the firm.

With nearly 350 participants from Europe, the Americas and Asia, the survey provides insight into management efforts to recover from the financial crisis and to position supply chains as an enabler of revenue and margin growth.

While optimism abounds—more than half of respondents expect average gross margins to surpass 10% over the next three years—three-quarters site demand and supply volatility, coupled with poor forecast accuracy, to be the biggest roadblocks they face in capturing profits from the economic upturn.

Driven by short-term exigencies, many participants did not strengthen critical capabilities during the recession. “Only a small percentage truly improved their supply chain flexibility to capture increased demand and to better manage volatility,” says Reinhard Geissbauer, director, PRTM’s Global Supply Chain Innovation practice.

Complexity also poses a concern. More than 85% of companies expect supply chain complexity to grow significantly by 2012, due to the challenges of serving new global customers—their primary source of revenue growth. Complexity will be driven by delivering products and services to new locations, and by the number of product variations required to meet the expectations of these new customers. Geissbauer says serving global customers extends the risk management challenge across the entire supply chain. To mitigate risk, more than 65% of survey participants list end-to-end supply chain practices at the top of their management agendas.

The report summarizes five supply chain challenges facing global companies: 1) Consumers are increasingly price sensitive and less brand-loyal, resulting in commoditization and a permanent increase in supply chain volatility, 2) While most participants are looking to international customers for growth, few are prepared for the complexity that results from serving customers with regionally customized products, 3) End-to-end supply chain cost optimization will be critical in the future, 4) Risk and opportunity management should span the entire supply chain, including those of key partners, and 5) Existing supply chain organizations are not truly integrated or empowered.

PRTM surveyed respondents between November 2009 and April 2010, and contrasted the responses with those of PRTM’s Global Supply Chain Trends 2008–2010 study, released in May 2008, and the firm’s Global Supply Chain Trends Extended Edition, released in May 2009. For complete findings or to schedule a discussion with a PRTM supply chain expert, contact Sharon Vanderheiden, svanderheiden@prtm.com, +1 651.730.0098.

About PRTM

Since 1976, PRTM has created a competitive advantage for its clients by changing the way companies operate. PRTM’s management consultants work with senior executives to develop and implement innovative operational strategies that deliver breakthrough results. The firm is a leader in operational strategy, supply chain, product development and customer value management. PRTM has 19 offices worldwide and serves major industry and global public sectors. More information is available from www.prtm.com.

Information from PRTM