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JDA & WMG, University of Warwick Study: Majority of European Manufacturers Are Only at the Early Stages of Digital Supply Chain Adoption

Research Shows Manufacturers Still Struggling to Effectively Integrate and Analyse Supply Chain Data; AI Usage Expected to Double in the Next Five Years to Capitalise on the Digital Opportunity

The majority of European manufacturers are only at the early stages of their digital supply chain journey, according to a new report from JDA Software, Inc., and WMG, at the University of Warwick. The ‘Delivering the Digital Dividend’ report benchmarked the digital supply chain readiness of 179 European manufacturers, revealing that only 13 per cent currently have a ‘prescriptive’ supply chain (categorised as Level 3, out of a scale of 1-4, with 4 being a self-learning autonomous supply chain). However, the report does reveal that manufacturers are keen to digitally transform their supply chains, with almost one third (31 per cent) predicting they will have a prescriptive supply chain in place by 2023.

New @JDASoftware and @warwickuni survey says: majority of European manufacturers are only at the early stages of digital #supplychain adoption: http://bit.ly/2rkO67U

Manufacturers missing the mark when it comes to data

The report reveals that most manufacturers are yet to fully harness the potential of digital to compete through greater customer intimacy. Although manufacturers are moving towards greater supply chain segmentation and differentiation, the biggest primary strategic focus is on operational excellence (39 per cent), rather than product leadership (31 per cent) and customer intimacy (30 per cent). Data remains a key ingredient towards delivering both operational excellence and greater customer intimacy, but manufacturers are struggling to integrate and synthesise it effectively. The evidence suggests that manufacturers are only just beginning to embark on data collection from new sources.

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Artificial intelligence (AI) is predicted to be the fastest-growing technology

Considering the data challenges facing manufacturers, it doesn’t come as a surprise that they are looking at new ways to come to terms with, and capitalise on, the exponential growth in data. AI adoption is predicted to grow three times faster than other areas of investment, such as sensor networks, Internet of Things (IoT) and robotics. Until now, however, only just over a quarter (28 per cent) have started to use AI.

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S&OP struggles, but segmentation and network design are early responses to digital complexity

The report suggests that when it comes to Sales & Operations Planning (S&OP), manufacturers have underlying problems to address. S&OP was rated as having the lowest level of maturity (34 per cent) of the 11 key supply chain processes manufacturers were asked about. Only 21 per cent of manufacturers have the ambition to use S&OP to support end-to-end business optimisation by 2023, and 22 per cent said the same for supply chain optimisation. This indicates that manufacturers should continue to focus on evolving from S&OP to Integrated Business Planning (IBP), as strong processes will underpin digital agility.

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