Friday 19th Apr 2019 - Logistics & Supply Chain

Survey reveals barriers to collaboration

Collaboration is still the big stumbling block to getting the most out of the supply chain. Despite the significant cost savings, shorter order cycles, better customer service and overall improved business efficiency that can be brought about through better collaboration between companies and their third party logistics providers, issues still prevail to prevent closer co-operation and true integration of the chain.

This was one of the key findings from a major survey into the current state of logistics outsourcing involving 1,644 logistics executives from North America, Europe, Asia Pacific and Latin America, conducted by Capgemini in co-operation with the Georgia Institute of Technology, Oracle and DHL.

The central themes highlighted by the survey revolved around green supply chain initiatives, security concerns and the integration of systems and services.

Whereas companies were almost unanimous in their belief that green supply chain initiatives are important, there is widespread uncertainty about how to move forward with sustainable supply chain operations. The report points to the increasing impact the “greening” of supply chains will have on network design, transport modes, business processes and ultimately, the balance sheet. Yet only 46 per cent of respondents said that the effect of supply chain operations on the environment was a factor considered when selecting a logistics service partner.

The report says that collaboration is key here, as it’s only when the source and impact of emissions can be accurately assessed that third party logistics providers and their customers will become accountable. This could be quite an obstacle to creating environmentally friendly supply chains.

Security in the supply chain was another concern, with companies becoming increasingly concerned about the costs of meeting compliance mandates designed to reduce terrorist threats. Here too, collaboration is seen as the answer, where setting in place the right processes can offer benefits that help recoup costs and improve efficiencies.

On the point of integration, the report once again points to the benefits of supply chain collaboration, which can only be achieved by putting aside fears over loss of control, internal competency and of being too dependent on a third party service provider.

Interestingly, although the survey shows that third party logistics operators and their users believe the associated costs of creating a more secure, integrated and environmentally friendly supply chain should be split, there is continued resistance to collaboration and the unspoken assumption is that costs will ultimately be carried by the customer.

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