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Sustainability ambitions boosts supply chain investments

New research from Blue Yonder found that 97 per cent of organisations faced disruption over the last 12 months. Factors outside of company control and the resulting consequences varied from company to company, with organisations facing customer delays (59 per cent), stalled production (44 per cent) and staff shortages (40 per cent). As a result of this disruption, the supply chain has become a priority for nearly two thirds of businesses.

The research, conducted by 3Gem on behalf of Blue Yonder, gathered insights from 250 supply chain decision-makers from the UK. It found that they are unsure about what the future holds, with 37 per cent of organisations concerned about the long-term implications of the COVID-19 pandemic on the supply chain. This is followed by Brexit (24 per cent), a pressure to be more sustainable (19 per cent), the changing regulatory landscape (12 per cent) and a lack of investment (seven per cent).

“Businesses are right to feel concerned when it comes to their supply chain,” Wayne Snyder, vice president, retail industry strategy, EMEA, Blue Yonder, said. “In 2021 we saw unprecedented disruption, and as we look ahead, several macro factors on the horizon are likely to drive further interference.

“To stay ahead of today’s supply chain complexities, organisations need to be able to plan intelligently, while having the visibility and flexibility to respond at pace. This can only be achieved by having a real-time, end-to-end view of the supply chain that leverages technologies such as artificial intelligence (AI) to recommend and optimise actions.”

The positive news is that organisations clearly understand the impact of disruption and are proactively managing concerns by investing time and resource in the supply chain. The research found an overwhelming majority (83 per cent) of organisations have increased investment in the supply chain over the last 12 months, with one in ten organisations investing more than $25 million.

Technology is the common factor when it comes to spending this investment. When asked about how they invested budgets, 86 per cent of organisations invested in technology, followed by developing new skills and defining a new supply chain strategy (60 per cent).

Interestingly, over half of organisations (58 per cent) also invested in the sustainability of the supply chain. This is an encouraging move, given that 2021 research from the MIT Center for Transportation & Logistics, found that nearly one in ten businesses had decreased their commitment to sustainability last year, while 55 per cent thought it remained the same or were unsure as to the status.

When asked about the technology that would have the most significant impact in reducing disruption, two thirds of organisations believe that having the ability to view and manage the supply chain from end-to-end will help them manage disruption better. This is followed by advancements in AI technology (53 per cent), new types of delivery options powered by the likes of robots and drones (43 per cent), and the use of technology to better manage their workforce (42 per cent).

“These stats highlight just how vital new technology is in reducing risk across the entire supply chain,” Michael Feindt, strategic advisor, Blue Yonder, added.  “Especially because 71 per cent of organisations have implemented new technology over the last 12 months to reduce disruption in the future.

“The study also showed that more than two-thirds of companies state that planning, forecasting, and inventory management were their most important areas for technology investment, with end-to-end supply chain management and AI technology deemed critical by more than half.

“Of course, disruption isn’t always avoidable, but having the technology in place to support change and empower organisations to make decisions in real-time will go a long way in minimising risk and improving overall business resilience.”

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