Three quarters of supply chain leaders believe more digitisation is needed

Supply chain planning remains an important aspect of wider business performance. While supply chain planning is generally well performed, new analysis shows that future changes, including more robust digital solutions, are likely to bring positive impact to performances in various segments.

Supply chains represent a key aspect of business performance. Large scale hickups, can be tiresome for businesses and their customers and clients. For the most part, companies are able to manage their suppliers, with problems often being smoothed over. However, supply chain fragility remains a key risk for the global economy, with major crises’ throwing spanners in the works.

However, aside from major disruption to global networks, companies are also increasingly facing challenges from improved supply line efficiencies – particularly from competitors. New technologies are improving the potential efficiency of supply chain management, and with it a variety of outcomes. Roland Berger surveyed 200 operations executives across major global markets in order to examine how these changing factors might impact the future of supply chain management.

Overall, respondents believe that their current supply chain strategy is effective (correctly aligned), as cited by 67% of respondents. As it stands, most respondents believe that their current supply chain strategy meets their current business requirements. There is concern among respondents however, about the future, with around a quarter saying that their supply chain strategy will not meet future business requirements.

When asked to define their current supply chain operations in more detail, a more nuanced picture was disclosed. Demand planning is relatively poorly performed, with 44% of respondents saying that the segment is performed well, and 56% saying that it is highly standardised. Sales and operations planning, meanwhile, has a stronger performance record, with 67% saying that it is performed well, and 69% saying that it is highly standardised. The respondents are the most positive about production planning, with 75% of respondents saying that it is performed well, and 80% noting high-standardisation.

Digital supply chain planning

The survey also sought to see in how far changes to the supply chain planning IT system landscape have been implemented in various aspects of the wider landscape. The majority of respondents (56%) said that the current SCP IT system landscape does not adequately and effectively support SCP requirements.

In terms of digitalisation, 75% of respondents said that the current SCP IT landscape does not have a high level of digitalisation in demand planning, while for S&OP, 58% reported the same. Production planning SCP IT systems have the highest relative level of digitalisation, as cited by 56% of respondents.

According to the respondents, the digitalisation of SCP has a strong impact on a number of SCP variables. The reduction of stockouts is the most positively affected, cited by 77% of respondents, followed by increasing lead times, cited by 67%. Reducing slow-moving and obsolete inventory is also noted as boosted, cited by 55%, while 68% say that it has an impact on reducing the number of short-term planning changes. Reducing inventory levels and increasing forecasting accuracy were the least cited, at 50% yes and 42% yes, respectively.

Supply chains are also a key area of controversy, with opaque supply chains and poorly managed supply chains being implicated in a wide array of controversial practices. Finally, sustainability and strong supply chain management were linked in recent McKinsey & Company analysis.