Resiliency is top supply chain priority, study finds

by Inside Logistics Online Staff

OTTAWA – Making their supply chains more resilient will be the top priority for many companies over the next three years, new research – conducted before the Covid-19 pandemic – has found.

Findings show that supply chain planning drives better performance in the modern enterprise, ringing especially true in today’s uncertain and disrupted business climate. Global supply chains continue to undergo almost unparalleled levels of change. With planning at the core, companies are now poised to realize the benefits of digital supply chain transformation.

Despite 65 percent of companies rating themselves highly in terms of resiliency, it remains the largest priority over the next 12 months and the next three years.

The ability to adopt new business models or enter new markets was cited as most important when considering future supply chain capabilities.

Sixty-five percent of companies believe that their supply chain planning capabilities are a source of competitive differentiation today.

This number falls to 35 percent by 2023, suggesting that companies either do not view their supply chains as adaptable or they are unconvinced that the resources they have in place today will service them well into the future.

Over half of the companies in the survey are still using spreadsheets to facilitate their supply chain planning efforts, while 76 percent of the most mature companies are using a form of AI today versus just one percent of the least mature.

Almost two-thirds (63 percent) of survey respondent companies are still below the transformation maturity midpoint, with lack of supply chain visibility (16 percent) and data availability and quality (15 percent) as the biggest impediments to improving supply chain planning efforts overall

“After a long history of being relegated to support status, supply chains are now being perceived as a strategic tool for business performance and growth,” said Simon Ellis, program vice-president at IDC, lead researcher and author of the IDC whitepaper “Supply Chain Planning Drives Better Business Performance”, where the research was reported.

“Supply chain planning is at the heart of the modern supply chain and is central to overall transformation. If companies don’t get supply chain planning right, they don’t get the supply chain right; if they don’t get the supply chain right, they risk sales and profits.”

The IDC whitepaper, sponsored by Kinaxis, explores the results from a research study about current and future pressures on supply chain planning and how modern digital technologies are driving supply chain transformation initiatives.

The survey was conducted in the third quarter of 2019 and included 1,839 respondents across three regions and six different sub-industries within manufacturing. Key demographics include:

  • Respondents were evenly distributed across Aerospace & Defense, Automotive, CPG, High Tech, Industrial and Life Sciences.
  • Respondents were evenly distributed across North America, EMEA and APAC.
  • Of the companies surveyed, 16 percent were large enterprise companies above $5 billion in annual revenue, 70 percent were medium sized between $1 and 5 billion and 14 percent were smaller companies between $500 million and $1 billion.
  • All respondents either work in or have significant influence over their supply chain and self-identify as either supply chain planners (people doing the actual supply chain planning) or supply chain planning leadership personas.