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Warning: Weak business supply chain links

Warning: Weak business supply chain links

The number one challenge facing organisational supply chains is the ability to make sense of the overwhelming and disparate data, reports IBM.

The number one challenge facing organisational supply chains is the ability to make sense of the overwhelming and disparate data, according to IBM's latest Global Chief Supply Chain Officer study which interviewed some 400 supply chain executives in 25 countries. The study, entitled The Smarter Supply Chain of the Future, found that 70 per cent say this is the biggest challenge because as more information is made available, proportionately less is being effectively captured, managed, analysed and made available to people who need it.

"Unfortunately, because of cost and resource issues, these issues do not rank highly in terms of implementation activity to solve these problems," said Sanjeev Nagrath, partner, Supply Chain Management Leader, Global Business Services, IBM. "Only 16 per cent of respondents indicated that they are effective at integrating information and visibility across the supply chain with external partners."

The second most pressing issue for organisational supply chains, according to the study is risk management with 60 per cent citing risk as an escalating concern.

"This is especially important in these times where there are extreme demand shocks," said Nagrath. "With tainted products, terrorism, and the economic downturn, supply chains are destabilised as trading partners retrench or fail."

The key stumbling blocks to effective risk management are the lack of standardised processes, insufficient data, and inadequate technologies, the study found.

Opportunity knocks

In order to address these supply chain gaps, the study calls for a supply chain that take advantage of technology to connect with partners as well as to intelligently analyse data.

Smart devices -- such as sensors, RFID tags, and GPS systems -- and integrated ERP systems can capture real time visibility of forecasts and orders, schedules and commitments, pipeline inventory, and shipment lifecycle status.

"Automating real-time detection with smart devices increases flexibility, speed and accuracy to promote better decision making," said Nagrath. "In terms of visibility, supply chains will not only be able to see more events, but also witness them as they occur."

According to the study, closing these gaps is critical as it demonstrates the ability of organisations to lead their industry segments and demonstrate better collaboration, connection, and visibility in their supply chain.

"Leaders tend to have better planning with suppliers, replenishment with customers, inventory planning, and shared real-time data with partners," said Nagrath.

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