Almost two-thirds (63%) of supply chain professionals “lack the necessary data, platforms and technology” to make critical cost-saving decisions, a survey has found.
The survey, conducted by IHS Markit, found despite this shortfall, spend analytics was cited as the top priority for supply chain leaders in 2021.
IHS Markit said: "While respondents noted prioritising spend analytics and reported having a strategy in place to optimise costs, 63% lacked the necessary data, platforms and technology needed to make critical cost-saving decisions.
"The results represent a clear misalignment between strategic intent and capability and send a signal that significant investment is needed in technology, platforms and data to enable and deliver overall supply chain objectives."
Around 340 supply chain leaders were surveyed by IHS Markit across 60 countries and 33 industries to identify their priorities and capabilities.
Wilhelm Greyling, executive director of supply chain solutions at IHS Markit, said: “Supply chains can no longer operate as siloed, disconnected functions. Recent events such as the Covid-19 pandemic and the Suez Canal saga have illustrated the need for supply chains to be resilient and agile.
“Supply chains can only truly be optimised via end-to-end collaboration and visibility. As the old saying goes, you can’t manage what you can’t see; an integrated approach is not only a nice to have, it's essential.”
The survey also revealed that supplier risk management, contract management and environmental, social, and governance (ESG) were deemed the least important considerations.
Just over half (51%) of supply chain leaders reported having a strategy in place to combat ESG issues.
IHS Markit added that successful supply chains of the future will need to balance precise cost-optimisation strategies with a “proactive approach to risk management and ESG considerations”.
Greyling added: “Increasing legislation and regulation will continue to drive the importance of third-party risk management and ESG considerations, as companies increasingly become accountable not only for their own actions, but also for that of their suppliers.
“The reluctance in investment into the areas of third-party risk and ESG could easily wipe out a firm’s cost-optimisation gains, as the penalties for oversights or breaches can be severe.”
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