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12/08/2021

The top supply chain challenges are…

Dan Berthiaume
Senior Editor, Technology
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A new survey from SAP reveals leading supply chain concerns.

A new survey of U.S. supply chain professionals reveals procurement is becoming more important in combating the most common supply chain issues.

According to the survey, conducted by enterprise software provider SAP and Regina Corso Consulting, 90% of respondents said procurement has taken on greater responsibilities to address both supply chain and sustainability challenges.

Nearly half (49%) of respondents said supply chain shortages and disruptions are keeping them up at night. Other supply chain issues disrupting respondent sleep patterns include:

  • Sustainability (28%).
  • Reducing costs and/or saving money (27%).
  • Consumer feedback (21%).
  • Digital transformation (20%).
  • Regulatory compliance (18%).

Despite only 28% of respondents saying sustainability keeps them up at night, 91% said that their company has specific sustainability goals or objectives, and 95% say procurement plays a significant role in achieving those sustainability goals.

[Read more: Study: 98% of retailers having supply chain issues; will last beyond 2022]

Between the global pandemic, labor and supply shortages and increasing consumer demands for sustainability, the supply chain professionals surveyed agree that procurement has taken on a more strategic role to help mitigate key challenges. For example:

  • 50% say procurement is helping alleviate supply chain challenges by improving supply chain transparency.
  • 48% say it is helping develop better relationships with suppliers.
  • 45% say it is helping diversify suppliers for greater resiliency.
  • 33% say it is helping adapt payment terms to improve trading partner liquidity.
  • 21% say it is helping reskill workers to address higher-level business priorities.

Many respondents also indicated they think consumers have a part to play in easing the challenge of supply chain disruptions:

  • 54% say consumers should allow more time for fulfillment.
  • 46% say consumers should buy more local goods and order items earlier.
  • 33% say consumers should be willing to pay more to account for higher supply chain costs.
  • 32% say consumers should have more empathy and understanding for the delays.

“Supply chain disruptions aren’t a new challenge, but they’ve been dramatically compounded and lasting due to ongoing shortages and delays caused by the pandemic,” said Etosha Thurman, chief marketing and solutions officer, Intelligent Spend and Business Network, SAP. “To navigate these unpredictable circumstances, supply chain leaders must strategically leverage procurement to effectively manage supplier relationships, mitigate customer frustrations, control costs and ensure business resiliency.”

“If post-pandemic supply chains are to be resilient, they must be sustainable. It’s not enough to just track and extoll green virtues, sustainability must become part of the way that supply chains are run,” said Simon Ellis, Program VP, IDC. “On the other end, the growth of e-commerce and consumer expectations for ‘next day’ delivery often runs counter to sustainable fulfillment and carbon footprint. There will have to be a rebalancing or rationalization about the way that people consume: ‘do I really need the product the next day?’”

The research study was conducted Oct. 15-25, 2021, on a sample of 210 U.S.-based employees who work in the supply chain at companies with at least 500 employees.