‘Only one in seven’ organisations are able to scale digital supply chain initiatives
A new study from Capgemini has identified a ‘clear gap’ between expectations of what supply chain digitisation can deliver, and the reality of what companies are currently achieving.
While exactly half of the organisations surveyed consider supply chain digitisation to be one of their top three corporate priorities, most are still struggling to get projects beyond the testing stage (86%).
The Capgemini Research Institute surveyed supply chain executives from 1001 organisations across Consumer Products, Retail and Manufacturing industries about their existing digital supply chain initiatives.
Eighty percent reported revenue of more than US$1 billion in FY 2017 and the survey was conducted from April to May 2018.
Key findings from the report include:-
- Organisations are struggling to move their digital supply chain projects beyond the testing stage: While exactly half of the organizations surveyed consider supply chain digitization to be one of their top three corporate priorities, most are still struggling to get projects beyond the testing stage (86%)
- Most organizations have spread their investments too thinly and are struggling to scale pilot initiatives: The organizations surveyed have an average of 29 digital supply chain projects at the ideation, proof-of-concept or pilot stage. Just 14% have succeeded in scaling even one of their initiatives to multi-site or full-scale deployment. However, for those that have achieved scale, 94% report that these efforts have led directly to an uplift in revenue.
- Supply chain projects that lack strategic focus are less likely to be successful: The evidence from those who have moved to implementation suggests that companies are taking on too much, and not focusing enough on strategic priorities. The organizations who successfully scaled initiatives had an average of 6 projects at proof-of-concept stage while those who failed to scale averaged 11 projects.
Simon Mardle, Retail Supply Chain Principal at Capgemini, said: “Our research shows that the UK is starting to realise the value in investing in supply chain digitisation, with 58% of our UK respondents identifying this as one of their top three organisational priorities.
“It is positive to see momentum building in the UK as its understanding of the business values of these type of digital initiatives grows as traditionally, the region has tended to be more risk-averse than its global counterparts when implementing digital initiatives.
“However, in order to convert these significant supply chain opportunities into reality, UK organisations must ensure that their digital projects are bound by strategic focus rather than implementation for implementations sake.”