Supply Chain Digitalization Is Top of Mind for Many Manufacturers – Are You One of Them?

The world is changing constantly and quickly. Digital technologies and their related information flows continue to disrupt industries – creating new opportunities for customer service, revenue streams, efficiencies, and competitive advantage. Those that once viewed Amazon’s wild success as primarily a retail concern have now reconsidered, and if they want to be successful, re-positioned.

Amazon has raised the bar with regard to customer service, and now many business-to-business (B2B) companies expect the same service levels as today’s consumers. How manufacturers are responding to this “Amazon effect” is a prevalent theme heard from the respondents of JDA’s 2018 Intelligent Manufacturing survey, which will be announced tomorrow. We offer a preview of the results today on our blog.

The survey findings suggest that manufacturers are embracing a new retail-like role, with many investing in the following supply chain technologies to keep up with changing customer demands: inventory optimization solutions (43 percent), integrating planning and execution technologies (41 percent), warehouse automation (39 percent), inventory allocation and reliable promising (37 percent), and customer segmentation (23 percent).

Preparing their supply chains to be more responsive and meet rapidly changing consumer behaviors was a key point for respondents. They are planning to achieve this by focusing on several strategies such as enabling internal and external collaboration (51 percent), improving forecasting with demand sensing (44 percent), and by leveraging data science for forecasting insights (33 percent). Additionally, nearly a third (31 percent) are integrating sales and operations planning (S&OP) with sales and operations execution (S&OE) through a single, connected technology accessed by users across the supply chain. This data is reinforcing what we are hearing from the market that companies need an accelerated “closed-loop” capability between planning and execution.

Even though 70 percent of the survey respondents say supply chain digitalization is currently a major initiative or will be one within 12 months, only 35 percent of respondents expect that their company will be running a fully integrated digital supply chain within the next 2-3 years. This discrepancy indicates that for many manufacturers, while they see the value and the opportunity, the path to digital supply chain maturity is still unclear. For companies that are seeking to innovate and compete, and need help developing a digital supply chain roadmap, JDA can help. A good first step is to understand where you are from a supply chain maturity perspective, and then plot a journey map that is aligned to your business objectives and greatest areas of opportunity.

JDA collected responses for the 2018 Intelligent Manufacturing survey from 271 U.S.-based professionals across manufacturing and wholesale/distribution industries in February 2018 via a third-party research partner. Stay tuned tomorrow for the full results.

There is much value to be gained from supply chain digitalization, and it’s time for manufacturers to invest in the future, or risk getting left behind. For additional information on how to make the pivot to digital transformation, download JDA’s white paper on how digital technologies will be key to manufacturers’ future success.

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