Supply Chain Optimisation 'Stymied by Data Silos'
A major new report into how technology is revolutionising supply chains shows almost half of industry leaders are failing to optimise mission-critical processes.
The study, from Celonis, a global leader in process mining, surveyed 300 senior supply chain leaders from large enterprises in Europe and the US to learn how they are currently optimising their processes. It reveals many supply chain teams face barriers they say are holding back optimisation.
Among inhibiting factors cited are;
- Siloed data and teams
- Difficulty in identifying opportunities to improve
- Complexity of processes
- Legacy technology
- Resistance to change
Almost a third (31%) say process optimisation isn’t a priority as they’re often in firefighting mode.
On average, just 56% of business-critical processes within supply chain departments – such as planning, sourcing, production, distribution, and returns – are seen as fully optimised.
There is also a significant disparity between the number of supply chain leaders in the US (81%) who say more than half of their critical processes are fully optimised, in the central DACH European countries of Germany, Austria and Switzerland, where just 49% give the same response.
The report equivocates on the cause of this, saying it may indicate either that process optimisation is more advanced in the US, or that there is a difference in how supply chain leaders perceive process effectiveness in the two different markets.
Across supply chain, fewer than a fifth (18%) say they do undertake process optimisation on a “continuous basis”. Although low, the figure compares favourably with leaders from other sectors, with 8% in finance, 15% in both IT and process & operations). More than half (54%) of supply chain leaders have not optimised a single process in the past 12 months.
Barriers to optimising supply chain processes
In terms of the negative impact of sub-optimal processes, the report lists these as:
- Lost time and productivity (60%)
- Uncaptured value (40%)
- Monetary loss due to inefficiency (44%)
- Low employee morale (38%)
In terms of the most popular use cases of technology business
Intelligence tools (64%) – typically data-driven dashboards – are most commonly used, especially in the US, while robotic process automation (59%) and business process management (48%) are also popular.
In conclusion, the report says supply chain functions need to “adapt and operate with greater flexibility in an unpredictable environment”.
It adds: “Supply chain leaders recognize processes as a powerful lever to drive that change, and despite a variety of barriers getting in the way, many have already set out on the process optimization journey, driven by the need to reduce costs and harness new technologies, as well as the need to respond positively to future challenges.
“Supply chain leaders are moving in the right direction, using and evaluating the tools that will make their operations more efficient, more resilient, and more suited to a continually changing world.”
******
Check out the latest edition of Supply Chain Digital and also sign up to our global conference series: Procurement & Supply Chain 2024. Supply Chain Digital is a BizClik brand
