IDC Manufacturing Insights and IDC Retail Insights recently conducted a supply chain survey of 415 U.S. manufacturers and 179 U.S. retailers. The survey was designed to identify key business and supply chain issues, as well as how manufacturers and retailers expect to use IT resources to address those objectives and challenges. Because we conducted a similar survey in 2007, we can also evaluate how supply chain needs are changing.
Two Common Themes - Product Quality and a Better Connection to the Customer
Not surprisingly, our results reflect the growing number of recalls in categories such as automotive, toys, and grocery - product quality was identified as the most important supply chain initiative. In addition to product quality, a second theme also stood out in our 2010 manufacturing results - the increasing need to be more responsive to changes in demand. While reducing costs was the top supply chain priority for respondents, there was a significant interest in improving forecasting capability and accuracy as well as improving responsiveness to demand changes. This makes sense as companies begin to recover from the recession; managing the ability to respond to change and prepare for the return of demand is increasingly critical for business success.
IT Satisfaction Gap - Vendors Need to Deliver on Their Value Propositions
Our survey also revealed that there is an "IT satisfaction gap" among manufacturers, particularly in their expectations of how IT can enable them to respond to unanticipated change. We don’t believe these results are about dissatisfaction with IT departments, but instead underscore the need for IT vendors to do a better job delivering on their value propositions.
Two Most Common Supply Chain Application Investments - S&OP and Strategic Sourcing, with a Twist from Large Manufacturers
The interest in extending demand awareness to the supply chain also influenced the top supply chain application investment for manufacturers over the next 12 months - Sales & Operations Planning (S&OP). This is a clear shift from 2007, when S&OP was not noted as a priority at all. The change acknowledges the supply chain's need for better coordination with customer facing departments.
Investment in strategic sourcing was the second most frequently selected application investment, most likely because many manufacturers plan to use this application as a means of controlling costs. One interesting note from our results: among manufacturing companies with more than 10,000 employees, manufacturing execution systems (MES) is the second most common response after strategic sourcing in first, reflecting the renewed interest among large manufacturers in standardizing how they run their factories.
Join our April 30th Webcast
We hope you'll join us as we highlight more of our survey results on Friday, April 30 from 12:00 to 1:00 p.m., U.S. Eastern time. The webcast, entitled Supply Chain Innovation in North America -- Driving IT Investments to Support the Business, will be presented by Kimberly Knickle, Simon Ellis, and Leslie Hand.