Written by Alexa Cheater. This post first appeared on Kinaxis’ industry blog, the 21st Century Supply Chain.
It’s a simple question really. How confident are you in your organization’s Supply Chain, and its ability to actually perform in a way that supports your business needs? If you answered ‘not very’ you may be surprised to learn you aren’t alone.
According to the results of Deloitte’s third annual supply chain survey, a measly 38% percent of executives claim to be ‘extremely’ or ‘very’ confident their current supply chain has the competencies required to meet their needs. To me, that number seems frightening. It means almost two-thirds of executives aren’t confident about their supply chain’s capabilities!
What’s more, just 43% consider their supply chain organization to be ‘excellent’ or ‘very good’ when it comes to strategic thinking and problem solving.
But it’s not all bad news. Most of those surveyed recognize the rapidly changing landscape means they need to start increasing their supply chain’s capabilities. Deloitte asked respondents about what it calls 13 fast-evolving technical capabilities:
- Optimization Tools
- Demand forecasting
- Integrated Business Planning
- Supplier collaboration and risk analytics
- In-memory computing
- GPS and/or RFID
- Real-time shipment tracking
- Control tower analytics and visualization
- Advanced robotics in manufacturing
- 3D printing
- Wearable technology
- Artificial intelligence
- Advanced delivery systems
The vast majority, 94%, said they are currently using or expect to use Integrated Business Planning in the future, while nearly half have already implemented Supplier Collaboration and Risk Analytics. Of the 13 capabilities, Deloitte’s survey found just 27% of respondents are currently using Control Tower Analytics, but 53% they expect to use them in the future, while 37% are utilizing In-Memory Computing, with another 52% saying it’s something they’re planning on implementing.
In addition to adding new technical capabilities, respondents were also asked about the likelihood of making changes to their supply chain operating model over the next five years.
“Locating high-value added activities into Centers of Excellence” is a move that 48% say they’re ‘extremely’ or ‘very’ likely to make in the next five years. The survey gives Gartner’s definition of what exactly a ‘center of excellence’ is – “a physical or virtual center of knowledge concentrating existing expertise and resources in a discipline or capability to attain and sustain world-class performance and value across the supply chain.”
Many others expect to increase outsourcing of low value-added activities (44%), segment supply chain strategies and offerings with customer/product segments (42%) and align their physical network with an evolving customer footprint (41%).
Roughly one-third of executives also said their company plans to increase the span of control of their supply chain function over the next five years. Deloitte believes these changes aren’t just being undertaken for the sake of change, but rather, are in response to “a business environment of ongoing globalization, waves of disruptive innovation, and rising consumer expectations for “anytime, anywhere” service.”