Manufacturers falling drastically short in efforts to digitise supply chain, survey finds

Manufacturers with large supply chains are struggling to digitise interaction with their suppliers despite huge desire to do so, according to a new study.

A survey by leading digital managed services provider TrueCommerce found that as few as one in every 20 European manufacturers has entirely digitised its trading relationship with its supply chain. That’s despite more than three-quarters (79%) of the businesses surveyed wanting to trade electronically with their entire supplier base.

By comparison, the study found that, on average, manufacturing businesses trade electronically with just 57% of their supply chain, highlighting significant opportunities to improve cost and operational efficiencies.

With manufacturers seeing digital technologies such as electronic data interchange (EDI) and vendor-managed inventory (VMI) as key ways to manage costs and grow revenues, TrueCommerce’s study also identified the barriers preventing them from doing so.

For businesses in the process of, or considering, digitising interaction with their supply chain, a lack of internal knowledge (40%) was the main obstacle for them to overcome, while almost a third (31%) cited not having the right resources to support digitisation. 

David Grosvenor, managing director at TrueCommerce Europe, said: “Supply chains across every part of the economy are under more pressure than ever before as manufacturers at the head of the chain look to innovate in order to manage cost and remain competitive.”

“However, there is clearly a significant void between where businesses currently are and where they want to be in terms of their ability to automate processes and trade data both rapidly and seamlessly. Until they close this gap and improve the way in which they interact with the supply chain, the issue will ultimately continue to have a negative impact on their commercial performance and that of their wider sector.”

David added: “Investing and upskilling teams internally is clearly a priority but, with resourcing issues adding to existing industry headwinds, it’s important that businesses continue to seek support to alleviate those pressures. It is those manufacturers who will ultimately be able to develop a digital strategy that adds value to their operation.”