Old Processes Impede New Inventory Strategies
Few businesses use new technologies to tackle supply chain issues caused by the pandemic due to tighter costs and dependence on legacy work processes, says a recent survey from intelligence platform Verusen. This results in lost revenue and increased inventory costs.
Global supply chain executives responding to the survey cite poor data quality, siloed materials data, and legacy software systems as the main causes of poor materials management and supply chain planning. The report reveals:
- 43% of executives say they intentionally inflate their inventories to protect against further disruptions, raising their cost structures.
- 90% are focused on cost reduction and 75% are focused on operational risk reduction as their top procurement and sourcing strategies; however, these areas often conflict with one another.
- 65% of businesses’ materials management strategies haven’t changed since the beginning of the pandemic.
- 42% of executives say a one-off data cleanse project is still the leading approach to improving their data.
- 37% say they still use common tools, such as manual spreadsheets, to optimize materials management.
- 65% cite a lack of resources as the greatest barrier to digitizing materials management.
- 81% of respondents incorrectly believe it would take more than one year to implement an artificial intelligence-driven materials management solution.