The Top 5 Insights from the Geodis 2017 Supply Chain Worldwide Survey

Posted by Martin Verwijmeren on Jun 28, 2017 8:02:00 AM

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Last week, Geodis released their 2017 Supply Chain Worldwide Survey and it’s worth the read. The findings for the report provide a wealth of information and benchmarking stats on the current state of supply chain strategies worldwide.

I found many of the survey results to be in line with the trends we are seeing at MPO and wanted to share the 5 that are incredibly important as organizations look to evolve and innovate their supply chains.

Insight #1: Ensure OT/IN Deliveries is #1 Objective, Visibility is #3

According to the research, the top supply chain goal for most organizations is “Ensuring On-time, In-Full Deliveries” to their customers with “Improve product availability or delivery” and “Improve end-to-end Supply Chain visibility” as #2 & #3 respectively. This shouldn’t come as a surprise. The goal of any supply chain is to deliver based on the agreed upon service level of the customer. If you organization fails to do that, the supply chain and your reputation as a supplier has failed in the eyes of the customer.

Why I point this out, however, is that our ability to deliver OT/IN deliveries is getting much more complex and difficult with every passing day. With faster shipping, demand for greater inventory diversity and the need for multiple suppliers and partners, we’re seeing an increased expectation for more complicated orders that need to be delivered faster.

That’s why it’s no surprise that supply chain visibility moved up from #6 to #3 in just two years time in the survey. As mentioned in the report, businesses are focusing less on costs and more on value in their supply chains. It makes sense that they would look for ways to gain better insight, transparency and control over every step of the supply chain in order to better and more consistently meet customer service levels.

Insight #2: Supply Chain Complexity is Increasing

As mentioned above, complexity in the supply chain is increasing rapidly with no signs of slowing down with 70% of survey respondents saying their supply chain was “very or extremely complex.” Complexity was seen in multiple ways including Global exchanges (with North American companies having the most), multiple transportation modes (74% used more than 4), decentralized operations, increase in inbound and outbound partners, use of external logistics service providers, diversity of national regulations, increased ecommerce and delivery demands, reverse logistics needs and new mergers and acquisitions. All had the ability to greatly increase complexity in the supply chain.

Most of the companies we speak to see many of these factors affecting their ability to manage, control and optimize their supply chains. And with the increase in this complexity I believe we’ll see more look at their technology stacks to better connect their efforts and identify gaps that can be filled with platforms such as supply chain orchestration.

Insight #3: Supply Chain Investment leads to Top Line Growth

One of the most encouraging findings of the report was on investment in the Supply Chain discipline and its connection to business impact. From a management perspective, Geodis found that 67% of Supply Chain leadership positions are held by Top Management or at the C-Level, which tells us a lot about the strategic nature that supply chain is having on the business.

What’s even more interesting is that they found a connection in higher EBIT (earnings before interest and taxes) for organizations where Heads of Supply Chain were in the C-Level as well as companies that saw their Supply Chain as a competitive advantage.

This is important as it shows that supply chain is moving well past being strictly a cost center and organizations that look to it as a differentiator are reaping the rewards.

Insight #4: Visibility is Siloed, Not End-to-end

This was the most eye opening of the stats and we’ll have more on this in a future blog post but 77% of firms said they had “no visibility or a restricted view” with only 6% saying they had “complete visibility”.

For visibility, they looked at it across three main categories: Internal production, Inbound Suppliers and Outbound customers. Of the surveyed firms, 62% said they had “limited visibility” or visibility 1 to 2 steps from production.

As organizations look to embrace complexity in their supply chains, visibility becomes integral not just in planning but execution and supplier collaboration. This is backed up in the survey as well as 41% of organizations wished they had improved visibility on their suppliers and product availability. I see visibility as one of the key trends and focuses of organizations in 2017 and beyond.

Insight #5: Agility in Optimization and Outsourcing is Key

It’s no secret that agility in the supply chain is becoming integral for optimization and success in the face of increased complexity. And we see that organizations are investing in building agility into their supply chains.

62% of organizations have implemented “problem solving & continuous improvements” as a core practice in their supply chain. Most importantly, organizations with higher EBIT are investing more heavily in this optimization and seeing the impact on top line results.

It also makes sense that as organizations look to optimize their supply chain strategies and operational efficiency that they look to supply chain experts to outsource aspects of their supply chains with 84% outsourcing transportation services and 65% outsourcing warehousing services.

Done smartly this can greatly help improve capacity, reach and agility of your supply chain but it also can add complexity depending the transparency of the outsourced partner and your ability to collaborate with that partner. As organizations continue to find strategic partners to drive efficiency in the supply chain, it’s integral they invest in the technology infrastructure to track, evaluate and collaborate with their entire partner ecosystem.

How Supply Chain Orchestration Fits In

As we move to more nimble, complex supply chains we’re going to need increased ability to collaborate with all our stakeholders internal and external and be able to have visibility from production to customer in order to optimize our processes and execute in real-time. This is all to ensure we are meeting our customer service levels each and every time with OT/IF orders, the holy grail of supply chains.

Investing in technology such as supply chain orchestration, distributed order management or with logistics service providers that use supply chain orchestration as a backbone of their offering is more important than ever especially if you want your supply chain to be a competitive advantage in your industry.

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Topics: Supply Chain Trends, Supply Chain Orchestration, Supply Chain Visibility, Supply Chain Collaboration, Supply Chain Complexity

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