• Supply Chain

Outdated Operations and Technology are Hindering Supply Chains Today

Written by Robert Brice
March 26, 2015

Supply chain management needs new technology to grow

Global supply chains today have become more complex than ever before. Emerging technology has connected companies and manufacturers from different corners of the world, creating a web of supply chain operations. The need for cutting-edge systems is apparent, but not all organizations are utilizing the latest and greatest technology to their advantage just yet.

A recent study conducted by supply chain management consulting firm JDA Software found 58 percent of manufacturing and retail industry respondents have prioritized implementing a best-in-class S&OP process in the next 12 months. A majority of respondents said they realize global supply chains have increased in complexity, but most admit to relying on outdated processes and ineffective technological solutions to keep pace with growing international demand.

Executive respondents conceded they recognize global supply chain maturation, noting they have been slow to adopt new processes. Until manufacturers and retailers integrate operations with new technology, they will continue to struggle to optimize their supply chains from end to end.

Improve Agility and Service Levels

New supply chain management software has the ability to increase operational flexibility and agility, allowing businesses to scale with fluid demand. As international markets shift, manufacturers and retailers need improved agility to meet demand in different regions or areas of the world. Processes in one continent may vary from those on another or in an emerging market, so organizations must have the right tools to comply with any changes.

That type of agility has become a strategic prerogative for manufacturers and retailers today. In fact, 46 percent of JDA respondents said their strategic priorities included increasing agility in production planning processes. Organizations can get ahead of the curve by implemented cutting-edge supply chain and data management software on the back end.

Inventory management innovation was also cited as a primary focus for retailers and manufacturers, as 93 percent of respondents said improving service levels was a top-three priority in optimizing inventory management. Another 88 percent of respondents said moving inventory closer to demand was a top-three priority.

Moving Forward in the Supply Chain

Advancing the supply chain in today’s global marketplace must rely on cutting-edge systems. Traditional means of operation won’t scale as quickly and aren’t nearly as flexible as the latest supply chain management software. Moving inventory closer to demand requires real-time agility and analytics; without these capabilities, supply chains remain stagnant and behind demand.

In the future, manufacturers and retailers feel implementing automation to manage inventory will be a key initiative, as 59 percent of respondents said deploying some sort of automatic control was crucial to future growth. JDA statistics also found the top three supply chain planning and execution goals are all aptly summarized by addressing advanced software solutions. In fact, 100 percent of respondents said integration with a best-in-class S&OP process with the inventory planning process was a top priority going forward. Another 90 percent added rationalizing the product offering portfolio was a key initiative in the near future.