Third of executives dissatisfied with digital supply chain transformation

22 April 2016

Three quarters of executives surveyed believe that digital transformation of the supply chain is important and most of the those have started the process, according to research.

However, the study, which surveyed 337 executives from large global manufacturing and retail organisations across Europe and North America, said progress had been slow.

Only 5% of respondents were “very satisfied” with progress on digital supply chain transformation, while 30% were “dissatisfied”.

The study by Capgemini Consulting and GT Nexus examined the current state and future of digital transformation between organisations and all their partners across the extended value chain.

It found that 75% of respondents rated digital transformation of the supply chain as “important”, with 50% saying it was “very important”. Some 70% had started a formal digital supply chain transformation effort.

The biggest technology enablers of digital supply chain transformation were cited as supply chain visibility platforms/tools (94%), big data analytics (90%), simulation tools (81%) and the cloud (80%).

However, 48% of respondents said that “traditional” technology such as phone, fax, and email were still the dominant ways to interact with supply chain partners.

Nevertheless survey respondents expected dramatic changes over the next five years. While 15% said that the majority of data from the extended supply chain was accessible to their organisation, 54% expected this would be the case in five years.

And while just under a quarter (23%) said that most of the data from the extended supply chain was analysed and used for decision making, this was expected to be 68% in five years.

Almost all respondents expected more processes with suppliers to be automated and to receive more real-time status updates from across the entire supply chain, the survey found.

Digital supply chain transformation is expected to dramatically improve an organisation’s agility and response to changing market conditions or supply chain disruptions, as well as provide cost reductions for logistics, inventory, and maintenance, improvements in customer service and higher overall equipment effectiveness, according to GT Nexus.

Mitigating the impact of disruptions has become a major driver behind digital transformation but current levels of collaboration and visibility across the network are still low, according to the study.

Mathieu Dougados, senior vice president, Capgemini Consulting, said that a massive gap existed between where companies are now and where they expect to be in five years.

“Transformation initiatives inside the four walls of the enterprise pose significant challenges within themselves,” he said. “But in today’s globalised and outsourced world, digital transformation can only be successful if companies approach it with a holistic view of their entire value chain.”

Kurt Cavano, president of GT Nexus, said the survey showed that manufacturers and retailers clearly have an idea of where they need to be and what digital technologies will get them there.

“Supply chain transformation is a massive undertaking that requires leadership and vision at the C-level, and a holistic transformation approach that fosters automation, connectivity, data sharing, and collaboration across the entire value chain,” he said.

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