Only Half of Companies Working on Supply Chain Transformation - Global Trade Magazine
  January 30th, 2017 | Written by

Only Half of Companies Working on Supply Chain Transformation

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Sharelines

  • Digital technologies and ecommerce have forced companies to reevaluate their business models.
  • Only half of companies are investing in real-time data, internal collaboration, or supply-chain transparency.
  • There is lack of urgency to break down internal and external supply chain silos.

Supply chains are undergoing remarkable transformations. The continuing development and deployment of digital technologies and the proliferation of ecommerce have forced companies to reevaluate their business models.

A recent paper from eft discusses issues surrounding supply chain improvement and risk mitigation and reports on a survey of retailers, manufacturers, and logistics providers concerning their understanding of these issues and their plans to confront them.

Supply chain transformation has exposed issues not before considered to be competitive liabilities and underscores some lack of preparation for the changes in how business in being conducted.

“The challenge now for all parties in the supply chain ecosystem,” the paper noted, “including retailers, manufacturers and logistics providers alike is firstly how best to respond to the new digital landscape and secondly, how to measure performance of the systems and processes in this new reality. This is becoming especially crucial as it becomes more clear that many technologies are giving adopters a clear competitive advantage over those who do not.”

That’s why it is somewhat surprising that of the retailers and manufacturers that participated in the eft survey, only about half said they were currently working on bringing real-time data to their demand

forecasting process and supply capabilities, investing in technology to make internal collaboration more efficient, or increasing transparency and collaboration with supply-chain partners.

“This lack of urgency to break down internal and external silos,” the paper explained, “could mean that many companies either are struggling with legacy systems, processes and mindsets or have not yet devised a convincing strategy of how to integrate the technology into their businesses. However, since the other 50 percent of respondents said they would bring in these innovations in future, it could be that that they currently have other, more pressing priorities.”

Among the other findings in the paper, a majority of retailers and manufacturers said they want to increase innovation, especially in product ranges, and expand their direct global sourcing network. The keywords currently used by all parties active in the omnichannel supply chain are communication, collaboration, visibility and real time.

Logistics providers are keen to adopt technological solutions in the near term. More than half are currently investing in capabilities to communicate in real time or near-real time with suppliers and customers. Logistics providers are also looking for tighter relationships with their customers, with more than 60 percent of respondents saying they were working to share costs and actively engage on strategies to help fulfill their customers’ business plans.

Nearly nine of 10 retailer survey respondents said they were currently trying to optimize inventory size and networks to accommodate market changes. Sixty percent of retailers said they were endeavoring to increase forecast accuracy by getting real-time input from the field, while 70 percent of logistics providers admit their in-house collaboration is more ad hoc and less structured than it should be.