Widespread disappointment with supply chain software

1 June 2003
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02 June 2003 | Robin Parker

Almost half of attempts to use technology to improve supply chain management are failing to bring their expected improvements, a study claims.

In a poll of senior managers at big US, European, Asian and South American manufacturing and industrial firms, 45 per cent said their supply chain software did not meet their expectations.

The most common problems were an inability to forecast effectively, implementation delays and misguided expectations of just what the technology would achieve.

Firms spend more than $19 billion a year on supply chain software systems, according to Booz Allen Hamilton, which produced the report to mark the 20 years since it claims to have coined the phrase "supply chain management".

Enterprise resource planning software is the most popular purchase, followed by inventory and warehouse management and order management, the study says.

Booz Allen added that the real benefits come when the most senior executives take an interest in improving supply operations.

Those firms at which chief executives took an active role in implementing supply chain management systems saved 8 per cent a year, nearly double the savings at firms where responsibility rested further lower in the organisation.

Muir Sanderson, vice-president of Booz Allen, called on companies to "break the mould" in their deployments of supply chain software.

"Despite major advances in technology, supply chains still cost more than they should and the underlying reasons haven't changed in 20 years," he said.

"This is a wake-up call for chief executives to go 'back to basics' and pay closer attention to operations."

SMjun2003

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