Businesses with large supply chains are struggling to digitise interaction with their suppliers despite huge desire to do so, according to a new study. A survey by digital managed services provider TrueCommerce found that as few as one in every 20 European retailers or manufacturers has entirely digitised its trading relationship with its supply chain. That is despite four in five (82 per cent) of the businesses surveyed wanting to trade electronically with their entire supplier base.
By comparison, the study found that, on average, retail and manufacturing businesses trade electronically with just 57 per cent of their supply chain, highlighting significant opportunities to improve cost and operational efficiencies.
With businesses seeing digital technologies such as electronic data interchange (EDI) and vendor-managed inventory (VMI) as key ways to manage costs and grow revenues, TrueCommerce’s study also identified the barriers preventing them from doing so.
For businesses in the process of, or considering, digitising interaction with their supply chain, a lack of internal knowledge (39 per cent) was the main obstacle for them to overcome. Almost a third (32 per cent) cited not having the right resources to support digitisation.
“Supply chains across every part of the economy are under more pressure than ever before as businesses at the head of the chain look to innovate in order to manage cost and remain competitive,” David Grosvenor, managing director at TrueCommerce Europe, said. “However, there is clearly a significant void between where businesses currently are and where they want to be in terms of their ability to automate processes and trade data both rapidly and seamlessly. Until they close this gap and improve the way in which they interact with the supply chain, the issue will ultimately continue to have a negative impact on their commercial performance and that of their wider sector.”