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05/16/2022

The top supply chain concerns are…

Dan Berthiaume
Senior Editor, Technology
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A number of factors are impeding supply chain transformation.

A new survey reveals the main obstacles to supply chain transformation.

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. In comparison, respondents were less concerned about internal issues such as shorter product life cycles, risk of obsolescence, or more production options.

The survey reveals that external factors are also influencing the 2022 objectives for digital transformation in supply chain planning. As a response to labor shortages, 51% of respondents said they will increase automation in 2022 to focus staff on higher-value activities.

At 47% each, developing better and faster reactions to unplanned disruptions and increasing supply chain resilience are the other top respondent objectives for 2022. The top supply chain objective of 2021, keeping up with evolving customer behaviors and expectations, fell to number five in 2022.

Other notable findings include:

  • Half of respondents (50%) said a continued focus on people, process, technology and security implications is vital to delivering successful digital transformation results.
  • Forty-five percent of respondents said change management and effective communication is vital to delivering successful digital transformation results.
  • Forty-three percent of respondents said the need to develop leadership-driven goals is vital to delivering successful digital transformation results.

PWC: These factors keep supply chain execs up at night
Sixty-eight percent of 244 surveyed supply chain officers see supplier operational issues as a major risk (24%) or moderate risk (44%), according to the PWC Digital Trends in Supply Chain Survey 2022. Other leading risk areas identified in the PWC survey included securing raw materials from suppliers (64%: 27% major, 37% moderate) and insufficient diversification of supplier base for critical supplies (62%: 43% major, 19% moderate).

“The past two years have put a spotlight on the need for digitizing supply chain planning, and fortunately, more companies than ever are responding by stepping up efforts to transform their operations,” said Caroline Proctor, chief marketing officer, ToolsGroup. “The percentage of companies that are not pursuing a digital transformation strategy at all is, at 7%, the lowest we have measured so far. Our findings reveal increasing investments in software, automation and people.”

“The survey results show that companies are charting a steady course toward digital transformation,” observed Mark Baxa, CSCMP president and CEO. “As supply chain challenges become more frequent and intense, company leaders are increasingly focused on implementing solutions that can help them better manage risk, bypass skills shortage and become more resilient.”

From January to March 2022, CSCMP and ToolsGroup surveyed more than 300 supply chain professionals around the world.