New Survey from JDA and KPMG Highlights Top Drivers and Inhibitors of Supply Chain Investment
Last week JDA hosted more than 2,000 customers and partners at FOCUS in Orlando, Florida. During the conference, 90 executives from the manufacturing, retail and logistics industries attended the Executive Exchange, sponsored by KPMG LLP (KPMG). The Executive Exchange offered an exclusive networking opportunity in a trusted, non-competitive environment and featured many customer speakers including Polaris, Ingram Micro, Sally Beauty, Pactiv, Adient, Walmart International, DHL and Lowe’s. During the Executive Exchange, JDA and KPMG released an exclusive preview of the findings from the new survey, Digital Supply Chain in Retail & Manufacturing: A State of the Industry Benchmark, conducted by Incisiv.
The survey found that trying to keep up with customer expectations is driving retailer investment in the supply chain, while agility and innovation is driving manufacturer investment. One force, however, remains constant across both manufacturers and retailers: more than 50 percent state the need for real-time product visibility as the leading driver in digital supply chain investment.
Retailers’ Investment in the Supply Chain
For retailers, the leading drivers in supply chain investment are real-time product visibility (57 percent), end-to-end traceability (53 percent), and the ability to manage new fulfillment nodes (50 percent). Retailers view cognitive/predictive analytics as the most disruptive innovative technology, followed closely by Internet of Things and connected devices. When it comes to technology deployment, cloud is the de-facto option for retailers. Top inhibitors to supply chain investment for retailers are management commitment (70 percent), limited IT budget (60 percent), and no integrated strategy (30 percent).
Because retailers live at the frontline of customer expectations, a follower approach may not work in the future. The time to build an overarching strategy is now. Enabling the supply chain to evolve to meet customers’ changing expectations is key to retailer success for many years to come.
Manufacturers’ Investment in the Supply Chain
For manufacturers, the leading drivers in supply chain investment are real-time product visibility (50 percent), the need to innovate faster (40 percent), and lowering cost to serve through improved planning (33 percent). Manufacturers view Blockchain and autonomous vehicles as the most disruptive innovative technologies, and 50 percent will conduct a pilot of those technologies in the next 24 months. Manufacturers are clearer about their strategic direction and focus than retailers. It is the execution structure and change management capabilities that hold them back, as manufacturers cite inhibitors such as resistance to change (57 percent), complicated decision making (40 percent), and management commitment/data security (37 percent).
Manufacturers’ and logistics providers’ supply chains are critical to meeting the customer promise of fast and accurate shipping. They need the ability to expose real-time product information to their retail partners. Improving integrated planning and lowering the total cost to serve are core execution tenets that will continue to be a top priority as manufacturers try to squeeze efficiencies out of the supply chain.
Data is the New Currency of the Supply Chain
Cognitive analytics is overwhelmingly viewed as the most disruptive technology by executives for its ability to impact all parts of the supply chain – be it forecasting, fleet routing or inventory optimization. Using data effectively will become a key source of differentiation, and the vast amount of data that the supply chain collects creates both a huge challenge and an opportunity for retailers and manufacturers alike.
To learn more, download the executive summary, press release and register to attend the webinar on Tuesday, June 5, 2018 at 2 pm ET, featuring Kevin Sterneckert, GVP Innovation, JDA Software; Brian Higgins, Partner, Advisory, U.S. Supply Chain Practice Leader, KPMG; and Gaurav Pant, Chief Insights Officer, Incisiv.