Analyst Insight: As the economic recovery proceeds, companies should be changing their sights from mere tactical cost-cutting measures to more strategic improvement initiatives. Productivity increases and cost containment are now considered a given at the leading companies. The bigger benefits are coming from companies that are integrating logistics and distribution more broadly into innovative supply chain improvement strategies.

Analyst Insight: With online retail sales projected to reach 17 percent of total company sales in 2010 and double-digit growth expected each year through 2012, retailers must take measures to offer next-generation retail. That would create a model that focuses on consumers and their experiences up to and through the purchase, or moment of truth. While most retailers have invested in some form of online capabilities, few (7 percent) have built the appropriate supply chain infrastructure to support a true, seamless, cross-channel experience for the customer.

Analyst Insight: Last year's economic pressures were among the most severe ever exerted on the modern supply chain. In response, many organizations are searching for ways to cut costs from their operations, either by reevaluating their IT infrastructure or by reengineering their business processes.

Analyst Insight: Optimizing inventory safety-stock policies without considering capacity and material constraints is not enough. Inventory management should be viewed within the context of a supply and demand balancing process associated with S&OP. Rough-cut capacity planning within the S&OP process should be augmented with inventory analysis.

Analyst Insight: If an organization fails to accurately manage its warehouse, it runs the risk of selling stock it doesn't have or retaining stock it should have sold. Both of these situations result in lost revenue and potentially unhappy customers.

Analyst Insight: Simply handling storage and order fulfillment more efficiently than their clients could in-house is not enough. In difficult economic times, 3PLs are being called upon-and are uniquely situated-to take on additional tasks such as kitting, light assembly, and custom labeling, that will ease the burden on their clients' operations.