Industry News and Resources
SUPPLY CHAIN OPTIMIZATION OFTEN GETS BOGGED DOWN IN PRACTICE
08 May 2019
Although companies have recognized the potential of optimized supply chains, many of the projects nevertheless fail because they underestimate the complexity of the task. This is demonstrated in the latest edition of the Hermes barometer.
200 logistics decision-makers in Germany were contacted for the analysis . More than three quarters of them are now pursuing a structured approach to optimize their supply chain. The primary goals are saving transport costs, minimizing throughput times, optimizing inventories and increasing responsiveness. However, many companies do not seem to know what this implies in practice. For example, 73% of respondents feel that companies tend to underestimate the effort required. This is probably one reason why 23% of projects in larger companies are terminated prematurely due to lack of success. Not even starting them is not an option either however: 52% of managers said that there is much more pressure to optimize the supply chain now. The following reasons were cited: growing economic uncertainty, fluctuating commodity prices and the scarcity of resources.
A study by the consulting firm Capgemini recently found that above all large companies show a lack of focus when it comes to digitizing the supply chain. Although the 1001 respondents had initiated an average of 29 digital supply chain projects, only 14% managed to scale one of them to multiple locations or full capacity.