POOR SUPPLY CHAIN VISIBILITY OUR BIGGEST PROBLEM, SAY EXECUTIVES

IBM’s Global Chief Supply Chain Officer study, The Smarter Supply Chain of the Future based on face-to-face interviews with nearly 400 supply chain executives in 25 countries, reveals that 70 percent say their number one challenge is overwhelming and fragmented data, as well as a lack of ability to make sense out of the information. However fixing this “visibility” problem is low on action plans because it is costly, difficult, silos are worse than ever and respondents say they are just too busy.

Supply chain leaders understand the threat of information blind spots, but they are only cautiously optimistic that they are taking steps to use their valuable information for real competitive advantage. Just 16 percent indicated that they are effective at integration and visibility of information across the supply chain with external partners.

After visibility, the number two issue of concern for these executives is supply chain risk, with 60 percent of respondents saying this is escalating as a concern. Notably, the last decade has been peppered with wake-up calls: tainted food and toys, random acts of terrorism and, the downturn in global economics, which will destabilize supply chains as trading partners retrench or fail.

SMARTER APPROACH

“As important as ‘cheaper, faster, better’ is, this year, we’re beginning to hear a new verse – a clear message about the overwhelming need for greater visibility and flexibility to manage risk,” said Sanjeev Nagrath, global leader, supply chain management, IBM Global Business Services.

“A crisis in one country or region can now ripple very quickly across the world economy, creating tremendous turbulence. As supply chains have become more complex, global and stressed, the executives we spoke with believe they must drive far more intelligence throughout their supply chains if they are going to anticipate, rather than react.”

The IBM report stresses the need for a future supply chain that is thoroughly instrumented, interconnected and intelligent. This “smarter supply chain” brings together the ability of human know-how and technological excellence to make optimal use of machine-generated data – flowing out of sensors, RFID tags, meters, actuators, and GPS. The entire supply chain will be connected – not just among customers, suppliers and IT systems in general, but also parts, products and other smart objects used to monitor events within the supply chain.