You Are Only As Strong As Your Supply Chain

In a world that is becoming increasingly interconnected, supply chain effectiveness is becoming a key success factor for the global economy. Given this reality, the findings of a recent Deloitte survey are rather alarming. The study shows that only 38 percent of supply chain executives are either extremely or very confident that their supply chain organization has the competencies needed today.

The gaps are particularly evident in two critical areas – technology and human resources.

The Technology Gap

The largest global businesses have spent billions of dollars implementing and maintaining their B2B integration infrastructure. Yet, when it comes to improving overall process efficiency and adding new trading partners that would create a competitive advantage, most companies are held back by the limitations of custom integration and one-to-one mapping.

This is no surprise when you realize that most organizations are investing the majority of their IT budget and resources in maintaining their legacy ERP systems and related legacy technologies.

Today’s trading networks are growing more complex. The number of companies involved in the typical manufacturing supply chain may be in the thousands. These companies are producing a multitude of products with unique specifications, parts and tracking numbers, adding complexity and processing requirements that are far beyond what legacy enterprise systems and integration methods were designed to handle.

As Lora Cecere insightfully predicts, “canonical networks based on many-to-many data models will be the backbone of the future supply chain.” The question is how we get there.

Pointing to a positive trend, over 60% of supply chain leaders are embracing cloud-based solutions. Yet while the advent of cloud computing has been helpful, many of the barriers associated with traditional B2B integration have remained in place. As Forrester Research analyst Stefan Ried notes, “B2B communication, with its original form of EDI messages, is the oldest and unfortunately the least flexible form of integration between systems and different enterprises.”

The results are far from flattering: worldwide, fewer than 8% of B2B transactions are exchanged and processed electronically, according to the Billentis E-Invoicing/E-Billing International Market Overview & Forecast.

The Talent Gap

Linda Topping, vice president and chief procurement officer with consumer packaged goods manufacturer Colgate-Palmolive Co., recently told Industry Week: “Supply chain management is getting exponentially more complex, so supply chain talent is the price of admission for the next decade.”

According to the Deloitte survey, there is a shortage of analytical talent in the supply chain organization, and the demand for these capabilities is going to increase significantly over the coming years.

While multiple strategies may be needed to address the talent gap, I believe it is directly related to the technology gap. To attract the Millennials, supply chain organizations must modernize their thinking and provide a new generation of employees with opportunities to be part of a digital transformation.

Supply chain organizations would be well served by adopting a new B2B integration paradigm, one that can attract new talent while supporting agile supply chains with massive scaling of trading partners and efficient process automation.

To read more about the ways in which supply chain organizations can close these gaps and meet the demands of the agile economy, download our eBook 5 Keys To Scaling Supplier Collaboration.