As the growing number of Black Swan events in the supply chain rise, organisations are increasing their time dedicated to minimising the impact of disruption. In a recent study conducted by Ivalua and Forrester, the two found that 66% of organisations believe that better collaboration with suppliers is needed to increase supply chain resilience.
Within the report titled ‘Chain Reaction – Holistic Supplier Management is Key to Business Success’ the two leading organisations discovered key barriers to resilience including the inability to assess risk and collaborate with suppliers, as well as inadequate technology for identifying and triggering responses to disruptions.
Among those surveyed, 56% of organisations have implemented automated risk monitoring into their operations, 54% have increased inventory levels, 46% have switched to on-shore and near-shoring methods, and 44% have negotiated preferred supplier access to key goods to tackle disruptions.
“In an age when Black Swan events are becoming more commonplace, collaborating with your suppliers has never been more critical,” said Alex Saric, smart procurement expert at Ivalua.
He added: “Procurement teams are tasked with minimising the impact of supply chain disruptions, but all too often they’re unable to do so because of a lack of visibility into direct and sub-tier suppliers and an inability to collaborate efficiently and at scale. More needs to be done to digitalise procurement to unlock the power of supplier collaboration and ensure supply chain resilience.”
Organisations turn to suppliers to drive innovation
While 70% of organisations recognise the need for greater collaboration with suppliers to improve innovation, many struggle with the ability to assess supplier capabilities, face a lack of willingness to share innovations and lack the systems to enable effective collaboration.
In order to overcome such barriers, 57% of organisations are considering incorporating product and service innovation into procurement KPIs, with 56% giving suppliers more flexibility in how they meet requirements, and 52% reducing cost-saving pressures.
In addition, 58% of organisations are looking to implement systems that allow them to collaborate with suppliers when it comes to product innovation.
Saric commented: “A lack of collaboration has become a running theme for organisations, which is impeding them from realising greater value from suppliers – whether it’s driving innovation, achieving sustainability goals or improving supply chain resilience. A smarter, more holistic approach to procurement and supplier management is needed. By digitalising procurement processes, organisations can effectively discover, assess, engage, and monitor suppliers, enabling them to measure progress against key business priorities such as supply continuity, ESG performance and innovation.”
Despite being a priority ESG lacks adequate technology
While supply chain sustainability has increased in priority - according to 71% of those surveyed - many continue to face barriers to success.
According to the report, 43% of organisations lack the right kind of systems to enable efficient collaboration with suppliers to drive sustainability. 41% also lack the ability to measure progress when it comes to their ESG goals, and 40% are unable to engage with their sub-tier suppliers.
To read Ivalua and Forrester’s full report, click here.
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