SYSPRO study highlights need for collaboration to resolve supply chain issues

SYSPRO recently shared the findings of its 2021 global research study exploring the challenges and solutions to ongoing supply chain disruptions that manufacturers and distributors face today.

The online survey assessed the sentiment of 163 manufacturing and distribution industry professionals in North America, EMEA and APAC.

The study shows four key themes. The results highlight the need for a long-term digital strategy for manufacturers and distributors that incorporates improved customer-centricity, external collaboration and data-driven decision-making to aid the recovery process from pandemic-related disruptions.

Theme one: There is a disconnect between investment in internal efficiencies and external collaboration

The study reveals that 70 percent of businesses experienced supply chain disruptions over the last few years. At the same time, 60 percent of businesses were unable to engage and collaborate with customers and suppliers in real-time.  Consequently, those businesses were often unable to deliver to their customers.

The supply of inventory was not protected even though 65 percent of manufacturers and distributors invested in systems aimed at meeting order requirements and 64 percent of businesses invested in systems to manage inventory control.

“While the investment in internal efficiencies is crucial for any business, customer and supplier engagement should also be a priority. What we are seeing now, is a domino effect of supply chain disruptions. It won’t matter how businesses try to up their game internally, if they are unable to communicate effectively with their external ecosystem and respond to shifts in the supply chain, businesses may fall behind,” said Paulo De Matos, chief product officer at SYSPRO.

Theme two: Digital roadmaps do not align with execution

While building a digital roadmap, 69 percent of businesses considered a digitalization strategy aimed at enhancing existing business processes with digital technologies. However, only 29 percent of businesses committed to a full-fledged digital transformation strategy.

Forty-eight percent of businesses committed to improving customer service, yet only 23 percent of businesses included external collaboration (i.e. the ability to collaborate with customers) as part of their digital strategy.

There was a disconnect in the execution of the digital strategy, as revealed in the survey. Thirty-four percent of businesses focused on investments to improve internal operations management, quality management and warranty management. Thirty-three percent of businesses looking at improving sourcing, procurement and inventory management. Only 18 percent of businesses invested in business systems to improve external collaboration. Additionally, 50 percent of businesses chose to not invest in any systems at all and instead rely on current systems to keep the lights on.

Theme three: Supply chains are not competing at a global level

“Business models as we know it are changing before our eyes. The classic model of company vs company is giving way for supply chain vs supply chain where simply selling a product is no longer good enough to survive in the long term. Manufacturers today should ideally assemble a team of companies to offer the best product and best service at the best price. To do this successfully, the right data insights are imperative,” explained De Matos.

When asked about technological investments, 47 percent of respondents had invested in sensors and IoT networks. At the same time, only 20 percent of businesses had invested in data analytics tools to process and analyze the data that they were collecting, while only five percent of businesses had looked into AI and ML to draw any long-term benefit from the data collection.

Theme four: Customers are placed at the end of the supply chain and not at the centre

When exploring the domino effect of the challenges, only 22 percent of respondents said they had experienced revenue growth and only 26 percent of manufacturers reported that their customers were satisfied with them over the past 12 months.

“The customer experience can make or break a business. While businesses improved operational visibility through technological investments such as IoT or even looked into alternative eCommerce sales channels, the reality is that ongoing and instantaneous external collaboration with suppliers and customers is vital. A balance along the supply chain can be achieved when a customer is placed at the centre of the supply chain, and their experience is not regarded as an afterthought. With real-time data insights into customer needs, improved revenue will soon follow,” said De Matos.

“Overall, the study showed that your digital roadmap should be carefully aligned to changing business needs. An ERP system can support manufacturers and distributors by providing the platform that helps with automation of business systems. to handle procurement and sourcing policy changes, distribution and lead time planning; and analytics providing data real-time to support improved decision-making. While there has been downtime, manufacturers have the opportunity now to make a change to improve operational efficiency and thrive now and into the future,” concludes De Matos.

The full report is available at this link.