Study: Global supply chain is outdated

Scottsdale, Ariz. – For all the advancements in retail in recent years, the tools and processes supporting the global supply chain remain outdated. According to the results of a new JDA study, “JDA Vision 2015 Supply Chain Market Study,” 58% of retailer and manufacturer respondents named “integration of a best-in-class S&OP (sales & operation planning) process” as a strategic priority for the next 12 months, while 46% of respondents reported that their strategic priorities included “increasing agility in production planning processes.”



When asked about their priorities for optimizing inventory management, the top two responses were “improving service levels” (named as a top-three priority by 93%) and “moving inventory closer to demand” (88%). However, organizations lack a clear way to measure and improve effectiveness in this area; respondents provided at least 25 different metrics they apply to measure inventory management performance.



In addition, most companies are not implementing advanced technology tools in this area today. Fifty-nine percent of respondents cited “deploying automation” to manage inventory as a key initiative for the future. The top three supply chain planning and execution goals of all respondents can be addressed by advanced software solutions: integration of a best-in-class S&OP process with the inventory planning process (cited by 100%), improving planner productivity through better exception management and increased automation (93%), and rationalizing the product offering portfolio (90%).



For new products, 59% of responding companies either develop no forecast at all — or rely on a backward-looking forecast developed by the sales and marketing team. Even more surprising, only 3% of executives reported that their organization used any sort of algorithmic technology to forecast the effects of sales promotions.



On average, survey respondents reported that 33% of all customer orders require expediting, which erodes margins significantly. A surprising number of companies are failing to employ the powerful tools and best practices that can address this issue. Only 26% of transportation organizations employ a shared services model for centralized transportation management, and only 46% have created a core carrier program. In addition, just 43% of firms employ commercially available software solutions to optimize their transportation moves.