New Study Reveals Top Strategic Priorities for Global Supply Chains | Be Korea-savvy

New Study Reveals Top Strategic Priorities for Global Supply Chains

Innovation will dramatically shape tomorrow’s supply chains (image: 437th Airlift Wing at Wikipedia)

Innovation will dramatically shape tomorrow’s supply chains (image: 437th Airlift Wing at Wikipedia)

CHARLOTTE, N.C., Mar 20, 2014 (Korea Bizwire) – Supply chain executives want to invest in powerful new technologies and  business innovations to improve their supply chains, but are hampered by  a shortage of qualified talent and never-ending pressure to cut costs,  according to a new study by MHI and Deloitte Consulting LLP titled “Innovations  That Drive Supply Chains – The 2014 MHI Annual Industry Report.”

Key Study Findings Include:

  • The top two strategic priorities of executives are supply chain  analytics and multichannel fulfillment.
  • The two major barriers preventing innovation in the supply chain are a  talent shortage and a continuing focus on cost reduction.
  • Three emerging innovations are not yet top-of-mind for executives, but  may be soon: sustainability, mobility/machine-to-machine technology  and 3-D printing.

“For more than 60 years, MHI has been working to improve global supply  chains. This groundbreaking study helps continue those efforts,” noted  George Prest, CEO of MHI, an international trade association that  represents the material handling, logistics and supply chain industry.  “The findings of this study have significant implications for how  companies design and manage their global supply chains.”

“Respondents clearly identified the need to rethink their approach to  supply chain management,” said Scott Sopher, principal, Deloitte  Consulting LLP and the leader of its Supply Chain & Manufacturing  Operations practice. “In the past, organizations addressed supply chain  challenges primarily through cost reduction and operational efficiency  efforts. Today’s global supply chains require a new focus on technology  and innovation as well as a willingness to invest in these areas for the  long term. A true commitment to innovation will help organizations  better prepare for the future, manage supply chain risks and stay ahead  of the curve.”

Top Two Strategic Priorities: Supply Chain Analytics and  Multi-Channel Fulfillment

Supply Chain Analytics As global supply chains become  more complex and expansive, companies are keen to leverage analytics  that produce insights to improve customer service and reduce costs and  risk.

  • Nearly 80 percent of respondents said supply chain analytics is a  “very important” or “moderately important” strategic priority.

Multichannel Fulfillment Today’s consumers want it  all. They want to shop for what they want, where they want, when they  want – and then have all of their purchases delivered consistently and  quickly, whether their timeline is next-day or even same-day. Although  most retailers now do a decent job on the front end handling orders  through their various channels – retail, wholesale, and online – many  are still struggling to adapt their back-end fulfillment processes.

Retailers we surveyed said they plan to make significant investments to  build their multi-channel fulfillment capabilities:

  • Nearly three-fourths (74 percent) of retailers expect their  investments in multi-channel fulfillment to increase over the next  three years.

The Talent Shortage is the Biggest Barrier to Innovation Companies  need supply chain talent with the right skills, experience and mindset  to harness the value of supply chain innovations. Unfortunately, the  right kind of supply chain talent is extremely difficult to come by  these days.

  • More than 65 percent of respondents indicated that process, technology  and skillset gaps exist within their company.
  • The supply chain field is expected to add 1.4 million new jobs by  2018, according to MHI’s recently published report, “The U.S. Roadmap  for Material Handling & Logistics.”

Focus on Cost Reduction Could Be Choking Off Essential Investments in  Innovation Cost reduction is still the No. 1 priority for many  supply chain executives, according to our survey.

  • More than 70 percent of respondents across industries said that  controlling costs is a top priority for their companies and their  customers.

Emerging Innovations Offer Promise for the Future Sustainability The  traditional focus on cost-cutting in the supply chain is squeezing out  innovations in sustainability, even though executives believe these  investments are important.

  • Nearly four out of five respondents (79 percent) felt that  sustainability was at least “moderately important.”
  • More than 60 percent of respondents indicated that significant  capability gaps exist in their companies and clients that may prevent  them from effectively implementing sustainability programs.

Mobility and Machine-to-Machine Technology Mobility  and Machine-to-Machine (M2M) technologies can improve responsiveness and  customer service by providing supply chain workers with the information  they need – whenever and wherever they need it.

  • Nearly three-fourths (73 percent) of respondents said their companies  will continue to invest in this area, with nearly half planning to  increase their investment over the next three years.

3-D Printing Additive manufacturing – popularly known  as “3-D printing” – is receiving significant attention as an innovation  that could revolutionize production processes and have far-reaching  future implications for product supply chains. But supply chain  executives in our study did not see immediate potential for the  innovation.

  • Only 17 percent of respondents view 3-D printing as a strategic  priority.
  • 70 percent of respondents said 3-D printing is not a key consideration.

Access  the full report here.

About MHI

MHI  is an international trade association that has represented the material  handling, logistics and supply chain industry since 1945. MHI members  include material handling and logistics equipment and systems  manufacturers, integrators, consultants, publishers and third party  logistics providers. The association also sponsors trade events, such as ProMat  and MODEX,  to showcase the products and services of its member companies and to  educate industry professionals on productivity solutions provided  through material handling and logistics.

About Deloitte

Deloitte’s leading Supply Chain and Manufacturing Operations practice  helps clients address their most complex business problems and achieve  tangible, measurable and sustainable results. Kennedy recently named  Deloitte a global leader in Business Operations Consulting services  based on the ability to execute and completeness of vision.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a  subsidiary of Deloitte LLP. Please see  for a detailed description of the legal structure of Deloitte LLP and  its subsidiaries. Certain services may not be available to attest  clients under the rules and regulations of public accounting.

Source: MHI & Deloitte

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