A new report released by The Economist Intelligence Unit (EIU) about the future of supply chains finds that companies will pursue fewer production links and a stronger embrace of innovation over the next five years, helping their businesses adapt to potential disruptions and intensifying competition.
Rebooting supply chains: Shorter, smarter and more sustainable?, sponsored by Standard Chartered Bank, and based on a global survey, finds that 93% of the 522 executives surveyed say innovation is important for supply-chain management. Furthermore, 55% of companies describe digitisation as either an important or very important five-year objective for their supply chains. Companies also see a need for greater visibility across their sourcing networks, with 54% saying that achieving complete transparency about where and how their products are made is an important or very important goal.
Companies expect operational improvements and innovations will help them reduce the length and complexity of their supply chains. In the next five years, 49% of respondents say they expect their supply chains to be shorter and simpler. However, the study concluded that shorter supply chains may not necessarily be more simple, particularly for consumer-facing industries, where customisation and personalisation are becoming important trends.
Kevin Plumberg, the editor of the report, said: “We don’t expect supply-chain complexity to relent anytime soon when it comes to doing business internationally. However, digitisation of supply-chain information, increased transparency and more internal collaboration between functions can help companies with global supply chains become more efficient and effective.”
The report is available to download here.