Supply chains are broken, Celonis finds the gaps
has launched its “.” Surveying over 2,000 business professionals from industries such as retail, manufacturing and pharmaceuticals, Celonis looked to identify the execution gaps that are causing supply chains huge financial losses within procurement and order management.
A lack of executive sponsorship and flexible logistics networks were found to be negatively impacting business performance, resulting in lost opportunity costs totalling hundreds of millions of dollars. Celonis found that closing these gaps could alleviate up to $567 million in working capital.
Here are some of the key money-saving opportunities for supply chains the report revealed:
- The average company’s deliveries arrive on time only 54% of the time, compared to 83% for the best-in-class performers.
- A single purchase order costs the most efficient companies, only $1.35 per purchase order. Comparatively, for average companies, a single purchase order costs an average of $15, more than ten times the cost.
- The average company spends $29.31 on processing a single sales order, roughly three times the cost, versus the best performers who spend an average of $9.94 per sales order.
- The average company has a touchless order rate of 56%, while leaders reach touchless order rates of 80%.
- Just over half (56%) of orders are touchless for the average company, while the leaders reach touchless order rates of 80%
Extreme budget management has been highlighted as a key focus in 2021 as companies continue their efforts to digitise in order to better navigate supply chain and financial challenges brought on by the global pandemic.
Other root causes of execution barriers identified throughout the procure-to-pay process include:
- Rigid systems and technologies (41%)
- Broken or inefficient processes (39%)
- Organisational silos (37%)
- Rigid systems and technologies (42%)
- Fragmented data landscape (40%)
- Broken or inefficient processes (40%)
- Lack of executive sponsorship (41%)
- Fragmented data landscape (41%)
- Broken or inefficient processes (39%)
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.