Friday 30th Oct 2020 - Logistics & Supply Chain

Supply chains struggle under pressures from globalisation

Four out of five supply chain executives say the performance of their supply chains is average or poor owing to the effects of globalisation, according to a survey by Barloworld Supply Chain Software.

It also found that 63 per cent linked the poor performance to the number of partners involved, which they believe increases risk and in turn limits flexibility. Collaboration, visibility and performance management capabilities have been identified as three areas that may help mitigate the problems posed by globalisation.

Fifty four per cent of respondents said that globalisation meant collaboration needs to be cross-functional and cross-enterprise with shared accountability of how the supply chain performs, while 44 per cent called on improved data transparency. However, better visibility of demand was only seen as fundamental by 26 per cent. Accurate inventory and replenishment insights was identified as important by 33 per cent, together with building flexibility and elasticity in the logistics network – sought by 49 per cent.

Barloworld polled 90 cross-industry supply chain executives, most of whom were from companies with turnover over £1bn.

CEO Richard Forrest said: “The risks globalisation creates are not solely attributable to the number of partners involved in the now extended, internationally far reaching process of getting a product to a customer,” Forrest said. “In many cases, global companies are having to manage multiple supply chains. In response, companies must tailor and respond to divergent customer and supplier expectations. For this reason, improved performance requires the development of new capabilities which enable large international organisations to use the supply chain to achieve competitive advantage.”

Forrest noted that, while the survey highlighted a lot is being achieved in the development of the supply chain to overcome new risks and complexities, there are challenges that remain.

For example, to harness globalisation, many companies are focusing on the right process-based elements but when it comes to enabling these initiatives with the right technology, the survey highlights incongruity in their attitudes.

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