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Most retail CEOs say their supply chain is not ready for omni-channel

June 17, 2014

Digitally connected consumers have turned retail models upside down as omni-channel shopping has transformed supply chain from an important business concern to a mission critical one. So profound is this change that 50 percent of CEOs recognize that their supply chain can be a strategic differentiator. However, 83 percent of worldwide CEOs believe that their retail supply chains are currently “not optimal” for today’s changing retail environment.

In a global retail CEO survey of over 400 retail industry CEOs conducted by PwC for JDA Software titled "CEO Viewpoint: The Strategic Role of Supply Chain in an All-Channel World," CEOs indicated what they are doing to adapt to this changing environment and establish a new foundation for growth.

CEOs say their top priorities are centered on more traditional areas of growth: entering into new regions and markets; opening more stores; or mergers and acquisitions. These priorities highlight potential missed opportunities for more than two-thirds of CEOs who failed to consider enhancing distribution capacity and supply chain as a key contributor to drive profitable growth.

CEOs think three fundamental risks will have the most impact on their organization over the next three years: increasing competitive threats (41 percent); margin erosion and cost reduction (39 percent); and attracting and retaining customers (24 percent).

Fifty percent of CEOs recognize that their supply chain can be a strategic differentiator. The survey also revealed that CEOs who focus on optimizing their supply chains have 15 percent lower supply chain costs, less than half the inventory levels, and more than three times shorter cash-to-cash cycles.

Only 15 percent of CEOs believe that their supply chain today is resilient enough to address the threat of external disruptions.