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05/26/2022

How common is supply chain disruption?

Dan Berthiaume
Senior Editor, Technology
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Supply chain disruption is a widespread issue.

A new survey of senior executives reveals the extent to which businesses are facing supply chain disruption.

The 2022 Blue Yonder Supply Chain & Logistics Executive Survey of senior execs across manufacturing, retail, third-party logistics (3PL), transportation, and warehousing reveals almost all (88%) respondents faced disruption over the last year. More than one-quarter (26%) faced significant disruption.

Of the organizations that faced disruption, the biggest impact on supply chains were customers facing delays (58%), staff shortages (43%), and stalling of production (38%).

Over half of respondents (56%) said investment in their organization’s supply chain has increased over the last year, with 17% saying it increased a lot. Of those respondents who invested in their supply chain in the past year, nearly half (49%) have invested $6 million or more. Over a quarter (26%) have invested between $6 - $10 million, and nearly a quarter (24%) have invested $10 million or more.

When asked in what areas they have invested in over the last year, 57% of respondents said technology, 43% said sustainability, and 40% said additional workforce. More than four in 10 respondents (42%) plan to focus on the implementation and enhancement of warehouse management systems in the next 12 months, followed by transportation management systems (36%) and order management systems (32%).

Other interesting findings include:

  • More than half (55%) of respondents said ensuring inventory availability for high-demand products was most important for enhancing consumer experiences as the industry navigates ongoing supply chain disruptions.
  • More than four in 10 respondents cited consistent on-time delivery (43%), increasing consumer visibility regarding inventory (42%), and maintaining/optimizing fulfillment options like BOPIS, curbside pickup, and delivery (41%) as most important.
  • Half of respondents (50%) said they have increased manufacturing operations nearshore due to COVID-19 and geopolitical concerns, with 21% saying they significantly increased or have concreate plans to increase operations nearshore.
  • About two-thirds of respondents (65%) increased the quantity of nearshore suppliers due to COVID-19 and geopolitical concerns. Of that group, 25% have significantly increased or have concrete plans to increase sourcing from nearshore suppliers.
  • Almost six in 10 (59%) respondents said their company paused sustainability initiatives due to the pandemic. Of those who paused their sustainability initiatives, 37% have either fully or partially reinstated them.
  • To maximize sustainability throughout the supply chain, 39% of respondents plan to seek out more sustainable upstream operations (materials sourcing, suppliers and manufacturing), while 38% plan to offer flexible delivery windows for online orders. Other strategies include implementing eco-friendly packaging options (33%), moving inventory closer to customers (27%), reducing one-off packages (27%), considering carbon costs like fuel efficiency (23%), and investing in technology/automation (23%).

Survey: People pose supply chain challenge
Interestingly, the third annual supply chain study from supply chain planning software provider ToolsGroup and the Council of Supply Chain Management Professionals (CSCMP) finds that while more surveyed companies than ever (93%) are actively engaged in digital transformation, the people/skills deficit is the number one obstacle (53%) standing in the way of their efforts. Supply chain delays (25%), surging inflation (24%), and escalating fulfillment costs (19%) top the list of external concerns.

The Blue Yonder Supply Chain & Logistics Executive Survey was fielded by a third-party provider from April 4-5, 2022. The online survey research collected responses from more than 150 C-suite and senior executives across manufacturing, retail, 3PL, transportation, and warehousing, with responsibility for logistics and manufacturing operations in the U.S.