Visibility lacking in supply chain

Lack of insight into systems data is the greatest challenge facing organizations in the supply chain, yet many are not correcting this, study finds.
Written by Victoria Ho, Contributor

Lack of insight into systems data is the number one challenge facing supply chain organizations, yet fixing this issue ranks low on priority lists, a study has found.

IBM's survey of 400 supply chain executives globally had 70 percent of respondents saying their biggest challenge was making sense of "overwhelming and fragmented data". However, the survey said organizations were not fixing these issues because of reasons that include cost, difficulty, increasing silos and "respondents saying they were just too busy".

At a media briefing Monday to announce the survey results, Sanjeev Nagrath, global supply chain management leader, IBM global business services, said these information "blind spots" are responsible for organizations falling behind on multiple aspects such as risk management and effective communication with customers.

According to the study, 60 percent of respondents said risk is an escalating concern. Nagrath noted although risk management is a common practice in the financial sector, a much lower percentage of supply chain organizations focus on it. The survey revealed that 38 percent of respondents manage risk "in some manner", but they are not doing so on a standardized platform.

"Technology per se is not a barrier to visibility. It is the lack of standardization and governance. The technology frameworks we have today allow [organizations] to collaborate a lot more easily," he said.

The challenges to effective risk management that the executives cited were "lack of standardized processes, insufficient data and inadequate technologies", but Nagrath said the issue plaguing the industry is mainly that of governance.

Yeonho Yoo, partner, industrial sector and supply chain management leader for growth market units (inclusive of Asia-Pacific), IBM global business services, added that contrary to the notion of companies not having enough data, the quantity is so overwhelming that some organizations are discarding portions of it.

IBM also noted the lack of standardization is preventing effective communication between vendors and their customers. Sixteen percent said they were integrating data with those of external partners.

Without a "multi-partner collaborative platform", visibility into customers' needs is difficult, leaving supply chain vendors unable to predict customers' demands to their competitive advantage, said Nagrath.

Asian supply chain vendors competing globally
Yoo said responses from Asia-Pacific organizations were similar to that of global results, showing many are moving into a competitive "degree of maturity", he said.

"Compared to five years ago when there were more gaps" in operation procedures of Asian players when contrasted with Western counterparts, organizations from Asia and the West are today "dealing with similar problems".

Nagrath added that Asia's emerging markets may be in a more advantageous position compared to current mature markets, since the lack of legacy issues frees the former to quickly ramp up on new technologies and systems.

Twenty-five percent of the survey's respondents were from the Asia-Pacific region.

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