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Study: External collaboration vital to help disconnected supply chains
Mon, 4th Apr 2022
FYI, this story is more than a year old

A new study by SYSPRO has revealed that external collaboration may be the key to realigning the links of disconnected supply chains.

The report also highlighted four key themes that illuminate the need for a long-term digital strategy in the supply chain space, all of which focus on incorporating improved customer-centricity, external collaboration and data-driven decision-making.

Conducted towards the end of 2021, the online survey gathered data and insight from 163 manufacturing and distribution industry professionals of different managerial levels within EMEA, the Americas and APAC regions.

The four key themes found were:

The disconnect between the investment in internal efficiencies and external collaboration 

70% of businesses were reported to have had supply chain issues over the course of the pandemic, and 60% of businesses were also unable to engage and collaborate with customers and suppliers in real time. This, in turn, led to an increase in strained customer relationships and delivery issues.

In response to these issues, businesses were found to invest in short-term technology solutions to address the immediate business impact.

Even though 65% of businesses invested in business systems aimed at meeting order requirements and 64% of companies invested in business systems to manage inventory control, the supply of inventory was not protected.

SYSPRO chief product officer Paulo de Matos says prioritising and thinking carefully about the future should be a key consideration for businesses in these situations

"While the investment in internal efficiencies is crucial for any business, customer and supplier engagement should also be a top priority. What we are seeing now, is a knock-on effect of supply chain disruptions.

"It won't matter how businesses try to up their game internally, if they are unable to communicate effectively with their external ecosystem and respond to shifts in the supply chain, businesses may fall behind."

Digital roadmaps do not align to execution

The study found that when building digital roadmaps, 69% of businesses considered a digitalisation strategy aimed at enhancing existing business processes with digital technologies, but only 29% of businesses committed to a fully-fledged digital transformation strategy.

Roadmaps look to be the key to growth, and de Matos says external collaboration will help align execution goals.

"When deep-diving into the reasons behind the disconnect between digital strategy vs. digital execution, we found that 71% of businesses outsourced it to external service providers with no real understanding of the core business challenges or everyday reality of what was affecting the business.

"Businesses now have an opportunity to reset for the future and revisit their digital roadmap with the assistance of trusted advisors and industry experts. Of course, the inclusion of external collaboration solutions will be key."

Supply chains are not competing at a global level

Technological investments were found to be incoherent on a global scale with varying results. 47% of businesses had invested in sensors and IoT networks, but at the same time, only 20% of companies had invested in data analytics tools to process and analyse the data that they were collecting. Only 5% of businesses had looked into AI and ML to draw any long-term benefit from the data collection.

"Manufacturers today should ideally assemble a team of companies to offer the best product and best service at the best price. To do this successfully, the right data insights are imperative," says de Matos.

Customers are placed at the end of the supply chain and not the centre

The study revealed that only 22% of businesses had experienced revenue growth, and only 26% of companies had achieved customer satisfaction over the past 12 months. Supply chain issues were found to be decreasing customer satisfaction and leaving customers as an afterthought.

"A balance along the supply chain can be achieved when a customer is placed at the centre of the supply chain, and their experience is not regarded as an afterthought. With real-time data insights into customer needs, improved revenue will soon follow," says de Matos.