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All the indications are that the 2008 recession will give way to booming infrastructure spending as governments seek to revive their economies.
Accenture believes that companies wanting to supply infrastructure equipment and components must transform their supply chains to meet this burgeoning demand as they strive to achieve high performance.
As countries around the world prepare to spend billions of dollars to revive their economies in the wake of the 2008 recession, the world seems poised on the brink of an infrastructure boom. CIBC World Markets, a wholesale bank, estimates that total infrastructure spending over the next 20 years will reach $35 trillion—unprecedented since the explosive post-war growth that took place more than 50 years ago.
This projected spending is a huge opportunity for those companies that supply infrastructure equipment and components, but they face the challenge of transforming their supply chains to ensure they can meet soaring demand. Other challenges include:
To transform their supply chains, suppliers of infrastructure in pursuit of high performance will need strong supporting capabilities in three key areas: cost competitiveness, capacity augmentation and supply chain responsiveness.
These capabilities can promote conflicting goals within the same company and can take years to tackle. But time is short. Accenture’s experience has, however, shown that it is possible to complete a transformation of the supply chain within a matter of months—a transformation that can sustain profitable growth and lead an organization to high performance.
For example, Accenture helped an Indian manufacturer of infrastructure equipment to transform its supply chain in just 15 months—an exercise that would typically take at least two to three years. The results have been significant:
To take advantage of the planned spending on infrastructure, companies need to offer competitive pricing, near-instant product availability and product variety. Delivering these capabilities will require a bold moves to transform supply chains, thus paving the way toward high performance and profitable growth.
April 9, 2010
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