News

Digital divide in the digital supply chain environment

Consumers are expecting better service when it comes to product inventory, yet a new study reveals that most retailers aren't up to speed.

April 11, 2016

Consumers are expecting better service when it comes to product inventory, yet a new study reveals that most retailers aren't up to speed in providing real-time inventory checks.

Just 15 percent of retailers have access to data regarding the extended supply chain and just 23 percent of that 15 percent are analyzing data for decision making, according to the newly released "The Current and Future State of Digital Supply Chain Transformation," from Capgemini Consulting, GT Nexus and Infor.

The bottom line, noted the study, is that a majority of retailers aren't succeeding in offering transparency regarding delivery time and delays, and that store associates and customer service reps don't have access to real-time data regarding the supply chain process.

"Seventy-five percent of respondents say digital transformation of the supply chain is important, but a massive gap exists today between where companies are today and where they expect to be in just five years from now," said Mathieu Dougados, senior VP, Capgemini Consulting.

"Transformation initiatives inside the four walls of the enterprise pose significant challenges within themselves. But in today' globalized and outsourced world, digital transformation can only be successful if companies approach it with a holistic view of their entire value chain. That value chain can include hundreds of partners. So connectivity between partners, cross-company access to data, and the use network-wide analytics become the key focus areas," said Dougados.

According to the study, 50 percent of respondents admit that right now "traditional" methods such as phone, fax and email are still the dominant ways to interact with supply chain partners but 94 percent of respondents expect to receive more real-time status updates from across their entire supply chain in the next five years.

The study polled 337 retail and manufacturing executives in North America and Europe.

Key findings include:

• 75 percent of respondents say digital transformation of the supply chain is "important"
• 70 percent say they have started a formal digital supply chain transformation effort but less than 30 percent of respondents said they are dissatisfied with progress so far
• Only 15 percent of respondents say the majority of data from the extended supply chain are accessible to their organization. In five years, that number jumps to 54 percent
• Just 23 percent of respondents say the majority of data from the extended supply chain are analyzed and used for decision making. In five years, that number jumps to 68 percent
• Five years from now, 95 percent of respondents expect more processes with suppliers to be automated
• Five years from now, 94 percent expect to receive more real-time status updates from across the entire supply chain

"Supply chain transformation is a massive undertaking that requires leadership and vision at the C-level, and a holistic transformation approach that fosters automation, connectivity, data sharing and collaboration across the entire value chain," said Kurt Cavano, vice chairman and chief strategy officer at GT Nexus.

"This survey showed that manufacturers and retailers clearly have an idea of where they need to be and what digital technologies will get them there in the next five years. But it's going to be a real sprint given the current reliance on outdated, analog technologies such as phone, fax and email to collaborate and execute in the global supply chain. Meanwhile, risk of supply chain disruptions runs high, with an expensive cost to pay."