Nearly all executives surveyed (97%) noted significant disruption to their direct material sources. As many as 84% of procurement leaders believe that “dealing with supply chain disruption” is their biggest career challenge to date.
Since the outbreak of the new crown epidemic, the global supply chain of electronic products has been affected by various factors, including shortages of raw materials, factory fires, bad weather, stranded cargo ships, material contamination, and epidemic containment. Due to the lack of key components, some manufacturers have stopped production. In this context, "supply chain digitalization" is regarded as an important method to reduce risks such as supply delays and insufficient supply.
The research, commissioned by Ivalua, a leading global spend management cloud provider, surveyed 233 senior procurement executives from US and UK manufacturing companies.
Among them, two-thirds (67%) of the respondents said that they are not confident that existing technology can adequately meet the current or next three years' challenges. In addition, 90% of procurement executives said that the threat of supply chain issues is greater than the threat of competition from market dynamics, with a ratio of nearly 2 to 1. Companies that are slow to modernize therefore face serious business risks.
84% of companies view the modernization of manufacturing purchasing/sourcing functions as a current company priority, which has a direct impact on reducing direct materials risks and ensuring supply chain continuity.
According to the survey, about two-thirds (64%) of respondents said they do not believe today's supply chains can meet the growing expectations of executives. Only 46% of respondents said they have a deep understanding of supplier capabilities and risks. Notably, 71% of procurement leaders revealed that they had been forced to accept unreasonably high prices from suppliers who took advantage of supply chain issues.
Key takeaways: The supply chain crisis will persist - nearly half (44%) of procurement leaders expect the supply crisis to ease by the end of 2023, and only 18% think the supply chain crisis will ease by the end of 2022. Procurement leaders at companies with modern procurement technology believe that the supply chain crisis will end "early in 2022" more than twice as likely as "not until the end of 2023".
Technical Advantages: 76% of manufacturing procurement leaders use supplier management software to optimize supplier relationships. These procurement leaders said that their company's supplier relationships are almost twice as likely to be healthy, and they meet new product launch deadlines three times more frequently than before. In addition, 76% of procurement leaders with modern procurement technology said they have effective relationships with suppliers. They also believe that procuring technology is more important than increasing headcount.
Technology Gaps: Respondents said the most notable gaps in their current procurement and supply infrastructure include a lack of visibility into supplier risk, multiple systems creating a “disjointed” source-to-pay (S2P) process and a lack of spend reporting.
Leadership Challenge: 84% of procurement leaders say dealing with supply chain disruption is the most significant challenge of their careers. In fact, 92% of procurement leaders say avoiding supply chain disruptions is among their top three priorities this year. More specifically, key challenges that procurement leaders face when trying to modernize their supply chains include: (1) concerns about disruption during technology implementation; (2) skills shortages; and (3) the scale and challenges of change management .
Geographic Disruptions: According to surveys, managing geographic disruptions in supply chains has been a significant challenge. 89% of procurement leaders need to view supply chain data by geography, but only 73% can easily access this data.
ESG compliance: Procurement technology is key to promoting corporate ESG (environmental, social and corporate governance) and CSR (corporate social responsibility) initiatives in 89% of businesses. "The global supply chain crisis that began in 2020 has continued into 2022 due to the geopolitical events," Alex Saric, chief marketing officer at
, said in a statement. "As manufacturing companies battle the current crisis and work to avoid the next one, modernizing procurement technology has become a top priority.The right technology can increase transparency in assessing risks and contingency plans, making working with suppliers more effective and efficient. "
This article is translated from the sister website EPSNews of " International Electronic Business Information ". The original text is: Supply Concerns Outweigh Competition: Study
Editor: Clover.li
