May 12, 2021

How COVID-19 has affected digital supply chain planning

DigitalSupplyChain
Technology
resilience
covid-19
2 min
A recent study conducted by ToolsGroup reveals how COVID-19 has affected the transformation of digital supply chain planning.

A ToolsGroup study has revealed the extent to which businesses’ digital supply chain planning has been affected by the COVID-19 pandemic.

Conducted in collaboration with the Council of Supply Chain Management Professionals (CSCMP), the study involved the two companies surveying more than 200 supply chain professionals from around the world, specialising in areas such as third-party logistics (3PL), manufacturing, retail, and wholesale distribution.

 

The results

According to ToolsGroup and the CSCMP, the results of the study showed that 54% said they were “reaping the benefits of digital transformation” and that they were “managing covid-related demand and supplier uncertainty very well” as a result.

However, of those in the ‘evaluating’ or ‘not pursuing’ stages of the transformation, only 13% said that they were handling the same area with an equal degree of certainty. This suggests that digital technology and processes may allow for better management of disruption, the study revealed.

 

The top three ‘business drivers’ for digitising supply chain planning

The report also revealed the top three business drivers for the process of digitising supply chain planning. Of those surveyed, 44% believed one of them was the ability to keep up with evolving customer behaviours and expectations, while 43% said another key driver was the need to increase automation to focus staff on higher-level activities. An overall desire to improve business performance was highlighted by 42% of surveyees as the third most important factor.

Other factors outside the top three are improving customer service - chosen by 39% - improving reactions to unplanned disruptions (35%) and increasing overall supply chain resilience at 34%.

 

ToolsGroup 2019 survey

“In our 2019 survey, the biggest factor holding back digital transformation was 'fear of change'. Today we see a sharp contrast as COVID-related demand uncertainty has accelerated digitisation to enable future resilience," said Caroline Proctor, chief marketing officer of ToolsGroup.

She added: "Technologies such as demand forecasting and inventory optimisation, which automate decision making and free up working capital while guaranteeing service, are top priorities for investment."

The findings taken from the latest 2021 survey indicate that the digitisation of supply chain planning produces better outcomes if driven by those higher up in an organisation. President and CEO of CSCMP, Mark Baxa, said: “Whereas those not pursuing a strategy say their digitization efforts are being led by line-of-business managers.

“We believe the more successful companies are actively pursuing change for greater future resilience; the alternative is to be a victim of tomorrow's unplanned disruptions," he said.

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