Too often the response to these tough economic times has been to hibernate. While this strategy is certainly aimed at survival, not adapting to changing markets will leave companies unprepared when the economy rebounds. As the economist Joseph Schumpeter put it, companies that resist change are “standing on ground that is crumbling beneath their feet.”

These changes are not for a season; some argue that continual economic and social change is the “new normal.”  Instead of constantly reorienting to the changing conditions, perhaps a wiser approach derived from observing nature would be to create sustainable supply chain practices that adapt to conditions.  While the term “sustainable” has been used lately in the context of environmental and green issues, it also succinctly conveys the need to build and develop approaches and techniques for managing and operating the supply that will make the firm more responsive to a host of dynamic international conditions. 

The purpose of this report – our 18th annual study on trends and issues in supply chain, logistics and transportation management – is to examine the fundamental capabilities that firms must develop in order to establish sustainable supply chain management practices.  And, over the next few months we will be sharing more detailed results of the study highlighting these practices.

The findings from this year’s study suggest that there are strategic moves that the firm should make now to position itself and its supply chain to outperform the competition both now and when recovery happens.  They are:

• Building cross-enterprise approaches to managing supply chain activities.
   
• Determining the optimal balance between customer service requirements and the total landed cost of providing that service on an order-by-order basis

• Investing in approaches, tools and technologies that enable optimized supply chain decision making

The challenge that firms must deal with is how to advance these strategies in a period of financial adversity.  The economy has leveled the playing field for business.  In the past three years, the Masters of Logistics (firms with sales revenues greater than $3 billion) had created a notable competitive gap in logistics and supply chain management between themselves and other size firms.  This gap has almost disappeared in 2009.  The window of opportunity for medium- and small-sized firms to act is now.  The study findings indicate that the Masters have implemented initiatives that will enable them to emerge from the economic downturn in a position of greater strength than before the recession.