JDA Software Inc.’s latest Intelligent Manufacturing survey showed that in response to the “Amazon effect” and changes in consumer demands, manufacturers are increasingly taking on the “role of a retailer” while also rethinking technology investments.
Researchers at the firm said “in an effort to address future shopping behaviors and consumer tastes” 51 percent of respondents said they were “focused on enabling internal and external collaboration across the supply chain” while 44 percent were prioritizing “demand sensing” and 33 percent were keying into data science.
The poll found that 43 percent were “focusing their technology investments on inventory optimization solutions and integrated planning. Forty-one percent were focused on execution technologies, the authors of the report said adding that the survey findings “suggest manufacturers are embracing a new retail-like role and willing to cater to both consumer needs and the competitive direct-to-consumer space.”
About one-third of the respondents said they were committed to integrated planning, “wherein their long- and mid-term planning process is integrated with tactical execution through a single, connected technology accessed by users across the supply chain function.” JDA noted that in order to meet the “changing needs” of consumers, integration of sales and operations planning is critical.
Fred Baumann, group vice president of industry strategy at JDA, said the Amazon and Alibaba effect has “significantly compressed consumer order fulfillment delivery time expectations. Now, more than ever, planning and execution processes must be more tightly coupled. Yet even while our data shows a portion of respondents understand the importance of prioritizing both short-term execution and strategic long-term planning, too often we see manufacturing companies focused on one and not the other and it’s limiting the value of their planning efforts.”
Baumann noted that using real-time data inputs in planning and execution processes via an integrated approach can boost profits for companies that have implemented supply chain digitalization strategies. Baumann also described supply chain digitalization as a “strategic mandate” and a “dramatic differentiator that drives revenue and market share growth.”
“The companies that are investing in their supply chain today, that have support from their leadership teams, and those that are positioning the supply chain function as a key point of differentiation — these are the companies that will excel and achieve profitable business growth,” he said. “We see 35 percent of survey respondents aspiring to reach digital maturity in the next two to three years, but to achieve that goal and to be equipped to successfully go up against Amazon, these manufacturers will need to make digitalization a priority now.”
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