Germany 'ahead of UK in supply chain tech'

24 May 2018

German firms are ahead of their UK counterparts in developing digital supply chains, a survey of buyers has found.

In a survey of 150 supply chain executives, split equally between the two countries, a quarter of German buyers claimed their companies’ supply chains were fully digitised compared to just 5% of UK companies.

Overall 23% of respondents expected to have their supply chains fully digitised within one to two years, 39% believe it would take two to five years and 24% said five to 10 years.

Half of all respondents believe that digitisation of the supply chain has had a positive impact on profitability.

The survey, conducted by Infosys Consulting, aimed to see how companies were adapting their supply chain models to growth of industry 4.0 technologies, which include artificial intelligence (AI), robotics and the internet of things.

It found the need for investment in skills and expertise was rated as the number one obstacle to achieving operational goals, followed by digital security – including the threat of data theft, industrial espionage and attacks by hackers – which a quarter of respondents cited as the most significant barrier.

Just under a quarter (24%) of respondents considered the cost of purchasing and installing new technology to be the biggest challenge when it came to trying to digitise the supply chain.

The survey found almost a third (31%) of respondents said they had started incorporating AI into their supply chain, while 42% planned to do so within the next five years.

However, while most senior business decision makers from both countries said their supply chains were partly digitised, many still failed to see the value of an ethical supply chain, the report said. Nearly two fifths (38%) failed to see ethical consumption as having increased in importance over the past five years and an equal number did not see it increasing in importance over the next five years.

“While it is promising that more than half (62%) consider this a priority, there is still a significant number of decision makers that are not putting ethical business practices at the heart of what they do,” the report said.

“This is surprising, considering that, according to Ipsos MORI, 38% of consumers say they will spend more on a product if a company acts in an ethical way.”

More than four out of five (84%) of respondents cited new legislation as an important factor when it came to ethical sourcing. A further 83% cited new legislation as an increasing driver for change.

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