Logistics innovation 'hampered by C-suite, cash & staffing'

February 01, 2023

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A study published by Descartes Systems Group suggests firms where innovation is important to senior management are 20% more likely to have better financial performance.

Descartes Systems Group report reveals innovation in the logistics sector is being hampered by management problems, under-investment and staffing issues

The logistics sector is being hampered by management problems, under-investment and staffing issues, a new study finds.

Most (87%) of the 1,000 supply chain and logistics decision makers across the North America and Europe who were questioned say they face obstacles when it comes to innovating, the most serious of which are a lack of management focus, investment, and high worker turnover.

The study is published by Descartes Systems Group, which provides cloud solutions focused for logistics-intensive businesses. Customers use the service to route, schedule, track and measure delivery resources, and to plan, allocate and execute shipments and pay invoices.

It follows another report, from the Capgemini Research Institute, that suggests supply chain disruption is dampening investments levels and hitting business growth.

Respondents who said innovation was important to senior management were 20% more likely to have better financial performance, with 13% likely to enjoy lower employee turnover.

Six in 10 (59%) said cutting costs and improving reliability are the top reasons for driving innovation. Over half (52%) say environmental programmes and government mandates on sustainability were factors.

Cybersecurity is also a factor for 36% of respondents, with France (67%) and the US (66%) most likely to be innovating here.

The study also revealed the initiatives companies are prioritising include order fulfilment (47%), customer experience (45%), transportation processes (44%), and supply chain visibility (43%).

The area most in need of innovation was warehouse management systems (24%).

Disruption in the supply chain is seen as the top risk to business growth for 89% of organisations, ahead of rising raw material prices (79%) and the energy crisis (64%).

The report concludes: “Supply chains are ageing more rapidly than ever. Given highly-evolving market dynamics and the demands put upon supply chain and logistics organisations, standing still is not a viable option.”

See below for graphics showing the report’s headline findings.