Study highlights key technology areas where supply chain leaders plan to invest to improve the efficiency and resilience of their operations. By prioritizing investments in these functional areas, companies can improve climate resilience.
The pandemic crisis of 2020 marked an unprecedented turning point for global supply chains. If the pandemic was the catalyst of a major upheaval, it served above all as a revealer of the deep and structural failures that weakened this sector for years.
Sudden shortages of raw materials, sudden disruptions to production and massive delivery delays exposed systemic vulnerability, exposing already fragile supply chains to intense and unforeseen pressures.
This shock accentuated pre-existing challenges, because ultimately, the pandemic not only triggered a logistics crisis, it also highlighted the urgency for companies to rethink and strengthen their supply chain management strategies to better withstand future crises and ensure continued resilience.
A Blue Yonder survey of supply chain executives highlights three key challenges facing supply chains: managing disruption, rising costs and sustainability pressures. The 2024 Supply Chain Executive Survey was conducted March 1-15, 2024.
The study gathered responses from more than 600 executives and senior executives across manufacturing, retail, third-party logistics and government. Interviewees are responsible for supply chain strategy, logistics, planning and production operations in the US, UK, Germany, Austria and Switzerland, as well as “in France and the Benelux”.
Sustainability has become an important area of focus
The survey found that 84% of respondents experienced major disruptions in their supply chains. Factors such as lack of raw materials, delivery delays from suppliers, lack of labor and lack of transport capacity were cited as main causes of the disruptions. Additionally, extreme weather events, changes in shipping routes and geopolitical unrest have been identified as aggravating factors.
The survey indicated that inflation, globally, has caused cost increases in various supply chain positions, such as transportation, materials, labor and inventory. These rising costs are putting pressure on companies’ profit margins, making it difficult to maintain profitability in the current economic environment.
Sustainability has become an important area of focus for supply chain teams, with nearly half of survey participants saying their companies have increased their sustainability initiatives.
Key sustainable practices targeted include reducing waste and excess in supply chain operations, increasing transport efficiency by optimizing fuel use and network design, improving supplier sustainability, improving returns processes and promoting product innovations such as reducing packaging and designing for circularity.
Businesses are turning to technology solutions
In response to these challenges, companies are increasingly turning to technology solutions such as artificial intelligence and machine learning to improve supply chain resilience, agility and efficiency.
More than half of the surveyed organizations have invested significant amounts in their supply chains, with a focus on AI and ML to improve functions such as supply chain planning, transportation management and order management.
Key functional areas for future investments in supply chain technology, and identified in the 2024 survey, include the following areas:
Transportation Management Systems (TMS) : Almost half (49%) of survey participants plan to invest in TMS to improve transportation operations.
Warehouse management systems (WMS) : 41% of respondents are considering adding an advanced WMS to optimize warehouse operations.
Sales and Operations Planning (S&OP)/Integrated Business Planning : 37% of supply chain executives are focused on improving S&OP and integrated business planning processes.
Sales and Operations Execution (S&OE) : 37% of respondents are looking to invest in solutions that improve sales and operations.
Integrated demand and supply planning : 34% of respondents prioritize integrated demand and supply planning capabilities to improve forecasting and inventory management.
Supply planning : 34% of organizations are considering deploying a stand-alone supply planning program to optimize supply chain operations.
Post-planning : 32% of respondents are focusing on stand-alone demand planning software to improve demand forecasting and fulfillment processes.