EL SEGUNDO, Calif., Oct. 10, 2006 -- After last year's significant advancements, firms showed little progress toward overall supply chain goals, according to the fourth annual Global Survey of Supply Chain Progress from Computer Sciences Corporation (NYSE: CSC) and Supply Chain Management Review. The survey, completed by supply chain professionals in 21 industries, indicated gains primarily in specific areas such as strategic sourcing and inventory planning, and largely outside the U.S.

On a scale of one to five, with five signifying a fully evolved supply chain that employs Web-based tools and involves key external parties, 50 percent of respondents still identified their organizations at levels one and two of the model, while the other half reported progress into level three or beyond. These figures are consistent with last year.

"Firms are making concerted movement forward in nearly all categories of supply chain initiatives, however, many have hit the wall as they finish work bringing slower parts of their organization up to speed," said Chuck Poirier, author of eight books on supply chain management and a partner with CSC's Consulting Group. "As a result, overall progress across the enterprise is flat, and firms aren't reaping the benefits that come with advancement to the next level."

Specific reasons cited for lack of progress include a lower level of alignment between respondents' supply chain strategy and their business strategy, lack of executive visibility and accountability, and the inability to collaborate and share best practices across the extended enterprise. Forty-three percent of respondents (down from 49 percent in 2005) said supply chain strategy is aligned with corporate strategy. And, 43 percent (down from 56 percent in 2005) reported their strategies were reviewed formally every year.

The survey did show that firms were moderately successful achieving specific supply chain initiatives, with the best results coming from continued efforts in strategic sourcing of direct materials, supplier/customer relationship management and development, sales and operations planning, and strategic inventory planning.

"These results are very interesting as earlier surveys did not show this kind of concern for relationship management and joint planning," said Poirier. "Respondents outside of North America greatly influenced this trend."

Asian firms, for example, showed greater progress dealing with customer and supplier relationships and also led the new category of network partnerships. European firms led supplier management and development.

The survey also measured firms' cost savings as a result of supply chain advancement. Forty percent of respondents said that their costs had been reduced by one-to-five percent, 24 percent indicated cost savings of six-to-10 percent, and 11 percent reported savings in the 11-to-20 percent range. An additional one percent reported savings of more than 20 percent, bringing the total of respondents citing cost savings to 75 percent. This is slightly less than last year.

"Many companies in virtually all industries have now reported impressive gains from supply chain efforts, bringing the first two-to-three points of new profit to their financial statements," said Poirier. "What still remains are the higher levels of achievement -- the final three-to-five points of profit -- and the necessity to use collaboration and technology as the enablers. This will prove difficult for many, as the cultural inertia and departmental territorialism that typically resist sharing of knowledge on an external basis continue to be limiting factors."

The 2006 Global Survey of Supply Chain Progress was sent to supply chain professionals in North America, Europe, Asia, Australia and other selected countries around the world. The names were drawn from CSC's client base as well as from readers of Supply Chain Management Review and other publications of Reed Business Information.

A total of 134 respondents completed the comprehensive, eight-page questionnaire. The majority of the responses came from North America, mainly the United States, with about one third coming from Europe, Asia and the Pacific Rim. Twenty-one industries were represented, ranging from aerospace and defense to retail and consumer packaged goods to high technology and telecommunications. Organizationally, 51 percent of the respondents represented corporate entities, 28 percent were from wholly owned subsidiaries or strategic business units, and 21 percent were from groups or multiple divisions.

The survey report, which includes the complete set of questions and responses, and an executive summary, can be found at http://www.csc.com/2006SupplyChainSurvey.

About CSC

Founded in 1959, Computer Sciences Corporation is a leading global information technology (IT) services company. CSC's mission is to provide customers in industry and government with solutions crafted to meet their specific challenges and enable them to profit from the advanced use of technology.

With approximately 78,000 employees, CSC provides innovative solutions for customers around the world by applying leading technologies and CSC's own advanced capabilities. These include systems design and integration; IT and business process outsourcing; applications software development; Web and application hosting; and management consulting. Headquartered in El Segundo, Calif., CSC reported revenue of $14.6 billion for the 12 months ended June 30, 2006. For more information, visit the company's Web site at http://www.csc.com.

Excerpt from report: Alignment between IT and Corporate Leadership

We strongly believe that continued supply chain improvement requires a strong alliance between supply chain leadership and IT leadership. We noted in previous survey results that cooperation between these groups was improving. That trend continued this year but with some interesting nuances. Those rating the relationship as it pertains to introducing new technologies that can improve business performance as “very effective” or “somewhat effective” reached 34 percent. Another 31 percent were in the middle of the ratings. The variation by industry was what struck us as unusual. With the trend continuing to improve, as more companies recognize the need for this collaboration, a few industries showed a very low level of effectiveness. Aerospace and Defense was the lowest industry by far, with the majority of respondents rating the relationship as not very ineffective, followed by Consumer Goods and Food Service. Utilities, Telecommunications and Mining and Metals provided the highest ratings.