Companies that consistently digitalize their supply chains can expect annual revenue growth of up to 2.5 percent – suggests research published by McKinsey. Unfortunately, it turns out that 95 percent of enterprises do not fully use the potential of this new technology. Entrepreneurs realize that digitization of the supply chain is essential, but they point to a number of obstacles that stand in their way.
Accenture – an outsourcing company in the field of management and technology – estimated that one of the largest pharmaceutical producers, whose annual sales revenues amount to 10 billion dollars, could save almost 388 million dollars in production and delivery. Provided that they would just focus on developing the digitization of the supply chain.
The benefits are therefore measurable. Over 75 percent of companies confirm that their profits increased according to a DHL report on research into the digitization of the supply chain. Most often, respondents indicate the possibility of reducing costs, improving profitability, customer service, and supply chain efficiency.
Cloud, unmanned cars, robotics …
Business owners have no doubt that they have to focus on new technologies in the next few years.
According to the respondents, the big data analysis is the most important solution – 73 percent of them said that their company invested in this technology. In the next places there were solutions based on the cloud (63 percent), the internet of things (55 percent), blockchain (51 percent), machine learning (46 percent) and the economy of sharing (34 percent). When it comes to physical equipment, 63 percent of respondents declared that robotics is the most important, ahead of unmanned cars (40%), 3D printing (33%), augmented reality (28%) and drones (27%)” – reads the analysis of the DHL report.
It’s only the beginning
So much for the theory, because in practice it turns out that „new technologies and solutions are developing at such a fast pace and so significantly change the functioning of the industry on many levels, that supply chains have a problem with their quick adaptation.”
According to the report, only 5 percent of companies have implemented technologies related to equipment (i.e. autonomous vehicles, drones) throughout the entire supply chain. 10 percent do not care about it at all. 51 percent are making efforts, but are at the very beginning of implementing these solutions.
In the case of information-analytical solutions (including big data, internet of things) the situation looks similar. 5 percent of companies have implemented these technologies in the supply chain, while 7 percent do not use them. Nearly 60 percent try to use them.
What are the obstacles?
Where is the problem? Respondents indicate that they have concerns related to the reliability of these technologies (68%), resistance to changes in the organization (65%) and insufficient or long-term returns on investments (64%).
No wonder that most companies decide to digitize only one area of the supply chain (63 percent) in the beginning, or outsource it to an external company (55 percent). 46 percent conduct studies on the costs and benefits before the implementation – according to the report. Almost every third company starts with test pilot programs.