Lack of supplier-side automation 'hampering efficiency'

Autonomous spend management specialist JAGGAER has released a study showing that although suppliers see the value in automation, just 9% of them say they’re fully automated across their supply chains.

The company’s State of the Supply Side Report 2022 says suppliers believe the most valuable processes to automate are ‘responding to requests for proposals’ (RFPs - 43%) and ‘invoice management and collection” (43%).

Yet it shows that progress in transforming these areas is slow, with 89% of suppliers saying they have either not automated, or only partially automated, RFP responses. A total of 84% say the same for invoice management and collection.

Other key findings from the research include:

• Supply chain disruptions are hitting suppliers fast and hard. 73% of suppliers say shortages are having a major or severe impact on their business.
  Other top challenges include inflation (69%), workforce shortages (62%), strained production capacity (53%) and geopolitical risks (50%).
• Suppliers’ worlds are still highly manual.
  Top obstacles include having to manage multiple platforms at once (65%) and manual processes and communication with buyers (39%).
• Back-end operational challenges greatly hold suppliers back.
  Suppliers admit they could advance their strategic objectives – grow their business (74%), strengthen customer relationships (72%) and increase profitability and lower costs (59%) – with the right technology and more time.
  
• Suppliers see the value in automation and artificial intelligence (AI). Suppliers cite a centralized hub that provides access to a large universe of buyers (59%), data that shows how they stack up against competitors (57%) and automated workflows to improve collaboration (48%) as the three most promising advancements to improve their commerce experience.

Lack of supply side automation 'creating inefficiencies'

Georg Roesch, JAGGAER’s VP of Direct Procurement Strategy, says that although organisations are revamping supply chains in order to mitigate risk and improve resiliency, the research suggests "a lack of widespread automation on the supply side is creating inefficiencies that could stall broader progress and inhibit suppliers’ growth and performance”.

He adds: “True supply chain transformation requires a fully digitalized and frictionless commerce experience for both buyers and suppliers. Closing the gap on the supplier side will be essential to build resilience, boost speed and drive out costs for both parties.

“There’s no better time for suppliers to embrace automation. Inflation, talent shortages and disruptions will continue to impact global supply chains.” 

Roesch also stressed that expectations for suppliers to help advance environmental, social and governance and other strategic initiatives will rise. 

“Streamlining core processes will open capacity to focus on tackling these emerging issues and other business priorities,” he said.