Survey Finds Gap Between Supply-Chain Tech, Business Strategy

Survey Finds Gap Between Supply-Chain Tech, Business Strategy
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High tech and retail lead the pack with their supply-chain initiatives. In contrast, industry laggards in a variety of industries still equate "supply chain" with slapping on a piece of commercial software.High-tech vendors and retailers are at the top of the list when it comes to the progressiveness of their supply-chain initiatives, while the forestry and mining industries are near the bottom. Across all industries, big needs remain for aligning supply-chain technology with business strategy, as well as for collaborating with supply-chain partners, according to the results of a new survey.

Just as last year, a few players—such as Dell Inc. and Wal-Mart—are way ahead of virtually everyone else in their supply-chain initiatives, according to the report, which was produced by Computer Sciences Corp. (CSC) and industry trade publication Supply Chain Management Review for the second consecutive year.

But increasingly, Wal-Mart seems to be serving as a role model for some other retailers, Chuck Poirier, a partner in CSCs Supply Chain Solutions practice, said in an interview with eWEEK.com.

"If youd asked me just a few years ago, I would have said that Wal-Mart was the only progressive company in retail," Poirier said. "Wal-Marts competitors still tended to rely on their manufacturers and suppliers. But now, several others are pulling themselves up, probably because theyve seen the results that Wal-Mart is getting with its supply-chain initiatives."

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At the other end of the progressiveness spectrum are "heavy-duty" industries such as construction, forestry, mining, and oil and gas, Poirier said.

In the survey, participants were asked to rate their companies "stage of development" across various supply-chain areas. Essentially, results continued to show that most companies fall somewhere between Level 2 ("Optimizing Internal Integration") and Level 3 ("Advanced Supply Chain Management," or the beginning of integration with supply partners). Relatively few have moved on to Level 4 ("E-Commerce: Value Chain Collaboration") or to Level 5 ("E-Business: Full Network Connectivity").

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But within a variety of vertical markets, the study also discovered great disparities between companies at the leading edge and admitted supply-chain laggards.

Generally speaking, the laggards are "putting the cart before the horse," Poirier said. "Slapping down commercial, off-the-shelf software from i2 or Manugistics isnt enough. Companies first need to figure out the problem in their [business] processes, and fix that."

In the survey, conducted this year among 236 supply-chain professionals, 60.8 percent of respondents said they are currently using ERP (enterprise resource planning) systems to "advance supply-chain evolution and drive results."

Another 47.4 percent are using Web-based applications and services in their supply chains, whereas 46.4 percent are deploying inventory planning, analysis and optimization systems.

Tied for fifth place, at 43.1 percent each, were advanced planning, forecasting and scheduling systems and e-procurement and B2B (business-to-business) exchanges.

Next Page: Improved relationships between supply-chain professionals and their IT counterparts.

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