NEW STUDY REVEALS TOP STRATEGIC PRIORITIES FOR GLOBAL SUPPLY CHAINS
Supply chain executives want to invest in powerful new technologies and business innovations to improve their supply chains, but are hampered by a shortage of qualified talent and never-ending pressure to cut costs, according to a new study by MHI and Deloitte Consulting LLP titled “The 2014 MHI Annual Industry Report – Innovations That Drive Supply Chains.”
Key Study Findings Include:
• The top two strategic priorities of executives are supply chain analytics and multichannel fulfillment.
• The two major barriers preventing innovation in the supply chain are a talent shortage and a continuing focus on cost reduction.
• Three emerging innovations are not yet top-of-mind for executives, but may be soon: sustainability, mobility/machine-to-machine technology and 3-D printing.
Top Two Strategic Priorities: Supply Chain Analytics and Multi-Channel Fulfillment
Supply Chain Analytics
As global supply chains become more complex and expansive, companies are keen to leverage analytics that produce insights to improve customer service and reduce costs and risk.
Nearly 80 percent of respondents said supply chain analytics is a “very important” or “moderately important” strategic priority.
Today’s consumers want it all. They want to shop for what they want, where they want, when they want – and then have all of their purchases delivered consistently and quickly, whether their timeline is next-day or even same-day. Although most retailers now do a decent job on the front end handling orders through their various channels – retail, wholesale, and online – many are still struggling to adapt their back-end fulfillment processes.
Retailers we surveyed said they plan to make significant investments to build their multi-channel fulfillment capabilities:
Nearly three-fourths (74 percent) of retailers expect their investments in multi-channel fulfillment to increase over the next three years.
The Talent Shortage is the Biggest Barrier to Innovation
Companies need supply chain talent with the right skills, experience and mindset to harness the value of supply chain innovations. Unfortunately, the right kind of supply chain talent is extremely difficult to come by these days.
More than 65 percent of respondents indicated that process, technology and skillset gaps exist within their company.
Focus on Cost Reduction Could Be Choking Off Essential Investments in Innovation
Cost reduction is still the No. 1 priority for many supply chain executives, according to our survey.
More than 70 percent of respondents across industries said that controlling costs is a top priority for their companies and their customers.
Emerging Innovations Offer Promise for the Future
The traditional focus on cost-cutting in the supply chain is squeezing out innovations in sustainability, even though executives believe these investments are important.
Nearly four out of five respondents (79 percent) felt that sustainability was at least “moderately important.”
More than 60 percent of respondents indicated that significant capability gaps exist in their companies and clients that may prevent them from effectively implementing sustainability programs.
Mobility and Machine-to-Machine Technology
Mobility and Machine-to-Machine (M2M) technologies can improve responsiveness and customer service by providing supply chain workers with the information they need – whenever and wherever they need it.
Nearly three-fourths (73 percent) of respondents said their companies will continue to invest in this area, with nearly half planning to increase their investment over the next three years.
Additive manufacturing – popularly known as “3-D printing” – is receiving significant attention as an innovation that could revolutionize production processes and have far-reaching future implications for product supply chains. But supply chain executives in our study did not see immediate potential for the innovation.
Only 17 percent of respondents view 3-D printing as a strategic priority.
70 percent of respondents said 3-D printing is not a key consideration.