Recently Blue Yonder released the findings of its annual Supply Chain Executives Survey1, which echoed many of the key themes. It is clear that, across industries, companies are still challenged to operate their supply chains profitably and predictably in the face of ongoing disruptions, rising costs, labor shortages, and sustainability pressures. The great news is that, amid the chaos, we are seeing an increasing level of optimism.
Why? Because advances in supply chain technology, including the application of artificial intelligence (AI) and machine learning (ML), provide the capabilities to manage these and other challenges. Advanced solutions not only increase real-time visibility and alert all stakeholders to disruptions, but they also ensure that the right decisions — ones that strategically balance cost, service, sustainability and other considerations — are always made. Further, they enable an immediate, automated response that matches the dynamic business environment we are all operating in.
The 2023 Supply Chain Executives Survey includes feedback from over 300 C-suite and senior executives, and it once again serves as an important barometer to assess the state of supply chain across a range of industries in the U.S. A detailed report on the survey is forthcoming. In the meantime, here is a look at both the top challenges companies are facing, as well as the strategies they’re using to manage those challenges.
Survey Says: Companies Face Four Key Challenges
Blue Yonder’s survey revealed that companies continue to face four critical challenges in optimizing their end-to-end supply chains. These top challenges are:
- Ongoing supply chain disruptions. 87% of executives report that their organizations have experienced disruptions over the last year. The most common result is a delay in delivering to customers, cited by 52% of respondents.
- Rising costs. About half of the survey participants (48%) have watched their profit margins shrink due to cost increases. The top areas for rising costs are raw materials (43%), inventory (15%), transportation (14%), and labor (14%).
- Labor shortages. As talent remains scarce, 87% of companies have made internal changes to help attract and retain associates. These changes include more competitive pay scales and bonus structures (51%), as well as more flexible scheduling options (40%).
- Sustainability pressures. As customers and regulators alike demand greener operations, 84% of companies have increased or maintained their sustainability efforts. 43% plan to further increase the sustainability of their upstream operations.
Overcoming These Challenges Through Technology Investment
How exactly do executives plan to manage these significant challenges? The answer is clear: By investing in advanced supply chain technologies that are purpose-built to do so. Over half of companies (52%) have increased their investment in the supply chain over the last year, and 38% have invested more than $10 million in their supply chain. Among respondents, the greatest single area of investment is technology.
Companies are installing new digital solutions for the simple reason that they deliver proven results. Executives report that their previous technology investments have yielded improved efficiencies (54%), fewer disruptions (42%) and revenue growth (39%).
It is encouraging that 62% of executives say their company’s supply chain is reliable, and 51% call their supply chain responsive. However, less than half of respondents think their supply chain is sustainable (46%) or data-driven (30%). Clearly there is still room for improvement, which explains the high level of ongoing technology investment.
AI and ML: The True Game Changers
One of the largest focuses for investment continues to be an application of AI and ML across the supply chain, which only makes sense. As companies seek to manage disruptions, balance service levels and costs, maximize and augment their labor investments, and operate more sustainably, the magnitude and complexity of this problem exceeds human cognition.
Only AI and ML are capable of ingesting and analyzing huge volumes of real-time data from across the network, as well as third-party insights, with microsecond processing times. Only AI and ML can use this data to identify and manage ongoing disruptions automatically — balancing costs and other constraints, service targets, labor availability, sustainability goals, and other factors to arrive at optimal decisions, every second of every day.
More than 78% of survey respondents are already leveraging AI and ML in their supply chains, with the top applications including inventory and network optimization (33%), warehouse resource management (29%), supply chain risk management (26%), and demand forecasting (25%).
Blue Yonder: Solutions That Deliver Results
Having just attended ICON 2023, I can assure you that no provider is more focused on understanding the complex challenges faced by the world’s supply chains — and answering those challenges with incredibly powerful solutions, backed by AI and ML, that are also intuitive to use and practical to implement. Blue Yonder’s end-to-end capabilities span every area named by survey respondents as major targets for future investment:
- Workforce/labor management technologies (47% plan to invest here)
- Warehouse management systems (44%)
- Order management systems (40%)
- General supply chain visibility and transparency (36%)
- General supply chain automation (32%)
- Transportation management systems (30%)
Blue Yonder’s best-in-class capabilities span every one of these areas and integrate seamlessly to provide the industry’s broadest end-to-end platform for supply chain optimization. With established leadership in AI, ML, data science, predictive analytics, and process automation, Blue Yonder stands ready to help companies in every industry meet their most pressing challenges, as disruptions, cost increases, labor shortages and sustainability pressures only grow.
One of Blue Yonder’s greatest selling points is that its capabilities are already proven across thousands of customers. ICON attendees heard firsthand how Blue Yonder’s solutions are delivering results for Anheuser-Busch InBev, Bayer Crop Science, Coca-Cola North America (CONA), GXO Logistics, Honeywell, Mars, McDonald’s, Nestle Purina Petcare, PepsiCo, REI, Sainsbury’s, Walgreens, and other market leaders.
*Source: Blue Yonder