Supply chain management (SCM) has become one of the most important tools companies use to boost sales and earnings, according to a German industry survey.

According to the study, conducted by German market researchers Luenendonk among senior managers in mid-sized German companies, “efficient, flexible and strategically directed supply chain management has become the key driver in companies’ development.”

The survey, called “Breathing supply chains,” showed that strategic suply chain management is contributing the most to sales growth. Of the executives polled, 38 percent felt that a broad range of measures aimed at improving supplier selection and managing supplier relations better yielded positive benefits.

With regard to earnings improvement and cost reduction, 72 percent of those polled said process cost optimization, cycle time improvement and lowering inventories were the most important instruments.

Improvements in inventory management are the biggest factors in reducing capital employed. The study cited modern logistics concepts, flexible personnel planning, and optimizing sales and workforce planning in this respect.

“If you look at the results of the study, you can conclude that supplychain management is definitely capable of showing that it can make a contribution to a company’s performance,” said Luenendonk consultant Mario Zillmann.