Study: 75 Percent of Companies Plan to Build More Resilient Supply Chains

BluJay Solutions, a supply chain software and services provider in Holland (southwest of Grand Rapids), has released a new report that shows 75 percent of companies will make changes to their supply chain practices based on lessons learned from the COVID-19 pandemic.
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BluJay
Results of a survey commissioned by BluJay Solutions in Holland show that 75 percent of companies will make changes to their supply chain practices based on lessons learned from the COVID-19 pandemic. // Photo courtesy of BluJay Solutions

BluJay Solutions, a supply chain software and services provider in Holland (southwest of Grand Rapids), has released a new report that shows 75 percent of companies will make changes to their supply chain practices based on lessons learned from the COVID-19 pandemic.

The third annual report, titled “Creating Resilience Amid Disruption: Research on How Supply Chains are Changing for Success and Survival,” was conducted by Adelante SCM, in partnership with the Council of Supply Chain Management Professionals and provides insights into how supply chain organizations have navigated the pandemic’s global disruption and how companies plan to make their supply chains more resilient.

“Disruption has always been a part of managing the supply chain, but the velocity and scale of disruption that organizations have had to contest within 2020 has been unprecedented,” says Patrick Maley, chief marketing officer at BluJay Solutions. “Supply chains of almost every company in the world have been impacted, with some halting operations and others struggling to meet unexpected surges in demand.

“The pandemic has made it very clear how imperative supply chain resilience is to success and survival. We hope the results of this research will provide useful insights and spark important conversations between all stakeholders to create smarter, better, and more resilient supply chains moving forward.”

Supply chain professionals from industries including manufacturing, retail, and logistics service providers were surveyed, with 233 qualified respondents answering a series of questions about innovation, customer experience, and technology.

Seventy-five percent of the respondents expect to make moderate-to-extreme changes. More than a third of survey respondents (34 percent) expect their companies will make many or extreme changes in how they design and operate their supply chains to become more resilient.

When asked which functions or processes within their supply chain will require the most changes or re-evaluation, respondents rank IT capabilities (61 percent) and human resources policies (58 percent) as the top two. For many companies, the quick and unexpected shift to working from home uncovered shortcomings in their HR policies and IT capabilities, especially for those dependent on on-premise applications that are not accessible via the cloud.

A majority of survey respondents (53 percent) agree that creating a more resilient supply chain begins with developing stronger, more transparent relationships with key suppliers. That was followed by cross-train employees (49 percent) and expanding/diversifying the supplier base (43 percent).

While providing an enhanced customer experience has been particularly difficult during the pandemic due to stockouts and delayed deliveries, companies retain their belief that customer experience will become the number-one brand differentiator over the next five years, according to survey respondents. Sixty-two percent agree or strongly agree with this – a slight increase from 2019 when 61 percent responded the same.

As in 2019, there was a notable difference between North American companies and those in the rest of the world. Once again, a lower percentage of North American companies agree or strongly agree that customer experience will become the number-one brand differentiator compared to rest-of-the-world companies (59 vs. 67 percent). The gap between them, however, decreased by 38 percent compared to 2019.

Considering the large economic and financial impact of the pandemic, it’s not surprising, says BluJay, that reducing costs is the top factor driving supply chain innovation. This year, to reduce costs/become more cost competitive ranked first overall with 31 percent of top-factor votes.

On the flip slide, the top two barriers to innovation were siloed systems and/or processes (17 percent), followed by existing IT systems are outdated (14 percent), which remained consistent with the previous year’s results.

This year’s research also saw geopolitical factors and trade uncertainty emerge as barriers to innovation. For innovator/early majority companies, geopolitical and/or trade uncertainty received the most top-barrier votes (16 percent) while in contrast, this choice received only 7 percent of top-barrier votes from laggard/late majority companies. These results suggest to BluJay that global trade issues, like the tariff war between the United States, China, and other countries, as well as Brexit, are hindering innovation at some companies due to ongoing risks and uncertainties.

When it came to the top innovation drivers, creating a competitive advantage received a larger percentage of top-factor votes from Gen X respondents, meeting sustainability goals received more top-factor votes from Millennial/Gen Z respondents compared with Silent/Boomer and Gen X respondents. Additionally, Silent/Boomer respondents view external trading partners as being a much bigger barrier to innovation than internal functional groups, while Gen X and Millennials/Gen Z respondents believe the opposite.

To read the full report, visit here.

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