The high cost of poor data flow

15 November 2010

15 November 2010 | Helen Gilbert 

Fragmented supply chain information is costing British businesses up to £1.2 billion in missed sales each year, research has found.

Poor information flows along supply chain operations caused missed sales opportunities, an inability to meet peaks in demand and dissatisfied customers, according to findings presented at IT firm Oracle's roundtable meeting last week. 

The report, The Fragmented Supply Chain, quizzed 100 supply chain executives from large companies with 250 or more employees in the UK, who admitted poor information flows were having a detrimental impact on business performance.

Each supply chain executive spends almost half their time (48 per cent) sifting through spreadsheets, emails and databases to keep track of their supply chains, the research showed. Reasons cited for the disjointed information included: a heavy volume of information to manage (41 per cent); data held in multiple, isolated databases and spreadsheets (37 per cent); constant changes in the supply chain (34 per cent); and the complex nature of the supply chain (34 per cent).

Nearly half the firms surveyed (47 per cent) said this resulted in missed sales opportunities at a combined cost of £1.2 billion each year for UK firms.

Limited productivity, reduced competitive advantage, long product lead times and hampered growth and recovery efforts were also identified as problems caused by fragmented supply chains.

In some cases, the disjointed information flows across the business are so extreme that for one in three companies a physical product travels as fast or faster across the supply chain than the information related to it, the Oracle report claimed.

Andrew Spence, Oracle’s supply chain business development director, described information management for many supply chains as not reflecting the way organisations operate today.

“Companies are working with systems set up and designed for an environment where a lot of work is done within one company, rather than the vast network of suppliers, designers and partners that is the reality of the modern business,” he said.

“People are using spreadsheets and email to bring together disparate planning systems instead of a system that matches the 21st century requirement for collaboration across the supply chain.” 

The report can be downloaded here:

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