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Are businesses struggling to digitise their supply chain?

June 19, 2019

Having an electronic relationship with your supply chain has long been viewed as a panacea if you work with a large and potentially unwieldy supplier base. From our experience, we know that employing technology to facilitate better relationships can deliver major benefits, not only in lowering costs but also improving how quickly and accurately you can work.

But we also know that there are challenges that mean developing a seamless supply chain isn’t always as easy as it sounds.

We recently conducted a study into the level of digitisation in the market – focusing on the manufacturing and retail sectors – and the results highlighted that many businesses aren’t as far down the road as they’d like to be.

Our research found that as few as one in every 20 European retailers or manufacturers has entirely digitised its trading relationship with its supply chain. While the vast majority (82%) want to trade electronically with their entire supplier base, the average business is only managing to do so with half of its supply chain (57%).

Digital technologies such as electronic data interchange (EDI) and vendor-managed inventory (VMI) are tried and tested ways of automating and improving the speed and effectiveness at which you can interact with a supplier, through the electronic exchange of data. In fact, four-fifths (82%) of the European businesses we surveyed are actively using EDI.

When you consider the natural progression of businesses to a more evolved VMI or collaborative replenishment model, that figure falls to a third (68%).

Clearly retailers and manufacturers are acting on their appetite to digitise the supply chain but doing so at scale is proving more difficult. So, what are the barriers preventing them from making major gains?

A lack of internal knowledge led the way as the main obstacle that people need to overcome whilst almost two in five feel they don’t have the right resources to support digitisation. As little as 6% feel there are no challenges within their organisation.

As long as managing cost remains a priority for your business, the need to bridge the gap between ‘implementing’ and ‘mastering’ a digital supply chain strategy should be as well.

Working with the right partner will enable you to do so cost-effectively. As an extension of your team, we can free up resources and enable you to focus on other critical issues within your business. Our promise to you is that we’ll be proactive in our support to help you overcome the challenges you face when developing a truly connected supply chain.

For more information on the shifting role of technology in the supply chain, download our report.