Supply chain key as cash remains tight for 82% of companies: Ernst & Young survey



    TORONTO, June 29 /CNW/ - With cash still an issue for 82% of global
businesses, the supply chain represents both risks and opportunities for
Canadian companies, Ernst & Young says in a new global survey.
    "Cash is tight, and businesses cannot afford to assume anything right
now. Financial duress can overwhelm a supplier in weeks or even days. That's a
major risk to companies," explains Steve Power, Ernst & Young Partner. "The
old supply chain management approach won't work in this environment."
    The survey finds many companies are feeling the pain of supply chain
challenges. Fourteen percent of respondents have already lost suppliers to
bankruptcy (up 9% from January 2009).
    Power says companies can ease the burden by developing a fresh approach
for supply chain risk, while also looking for new potential.
    "Even in times like these, you can seize opportunities to build better,
leaner businesses," says Power. "It may actually be easier to get cash from
your supply chain than your bank right now. That's a lot of potential for all
the companies still struggling to access capital. Companies need to identify
that cash, and convert it to working capital."
    Power says that means concentrating on supply chain activities that may
provide immediate, high-impact results around cash preservation and cost
reduction.
    Canadian companies also need to consider the planning, visibility, risk
management, controls and accountability functions associated with their supply
chain.
    "Anticipating potential problems through scenario planning is an
important way to ensure your business is flexible and can move with the
times," said Power. "Contingency plans allow you to think each potential
situation through and then change direction swiftly, staying ahead of the
competition."
    Ernst & Young's Opportunities in adversity - Accelerating the change
surveyed 569 C-suite and board-level executives from different countries and
sectors. Other findings from this June 2009 research include:

    
    -  88% of global companies say their operating model has been altered by
       the recession.
    -  56% of executives say their risk management processes have been
       permanently altered.
    -  20% have seen an improvement in investor confidence; a similarly low
       number saw any improvement in accessing affordable capital or credit.
    

    Ernst & Young supply chain professionals are available to discuss the
risks the supply chain represents in tough times, the opportunities that arise
despite adversity, and the overall survey findings.

    About Ernst & Young

    Ernst & Young is a global leader in assurance, tax, transaction and
advisory services. Worldwide, our 135,000 people are united by our shared
values and an unwavering commitment to quality. We make a difference by
helping our people, our clients and our wider communities to achieve their
potential. For more information, please visit ey.com/ca.





For further information:

For further information: To reach a spokesperson, please contact: 
Amanda Olliver, amanda.olliver@ca.ey.com, (416) 943-7121; Brooke McLachlan,
brooke.mclachlan@ca.ey.com, (604) 899-3597; Marie-Eve Graniero,
marie-eve.graniero@ca.ey.com, (514) 874-4313


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