How Are Executives Reacting to Supply Chain Challenges?

Supply chain disruptions remain challenging hurdles for businesses as the world continues its recovery from the COVID-19 pandemic. Although the pandemic was a catalyst for the disruptions, other challenges did play their roles, such as customer purchasing behavior, which could result to customers facing delays with their orders.

Blue Yonder released findings from its “2022 Supply Chain and Logistics Executive Survey” and found how senior executives are tackling those supply chain challenges in the year ahead.

In the survey, 88% of businesses faced disruption over the last year, with 26% facing significant disruption. The biggest impact on supply chains were customers facing delays at 58%, staff shortages at 43% and stalling of production at 38%.

“It may not come as a surprise that most businesses have faced supply chain challenges over the past year, but the research demonstrates that supply chain disruptions are here to stay,” said Shri Hariharan, corporate vice president at Blue Yonder. “It is crucial for businesses to evaluate exactly where key pain points are to determine where and why to invest in intelligent technologies that can help mitigate risk and improve supply chain resiliency.”

The survey found the past year saw an increase in supply chain investments.

• 56% of supply chain executives said investment in their organizations’ supply chain increased over the last year, and 17% said investment increased a lot.
• 49% have invested $6 million or more, 26% invested between $6-$10 million, and 24% invested $10 million or more.
• 57% of respondents invested in technology, 43% of respondents invested in sustainability, and 40% of respondents invested in additional workforce.
• 42% of supply chain executives plan to focus on the implementation and enhancement of warehouse management systems in the next 12 months, 36% of supply chain executives plan to focus on transportation management systems, and 32% of supply chain executives plan to focus on order management.

Supply chain executives are focused on improving customer experience by keeping high-demand items in stock, providing consistent on-time delivery, increasing inventory visibility and optimizing fulfillment options, even with supply chain disruptions.

• 55% of respondents said ensuring inventory availability for high-demand products was most important for enhancing consumer experiences when navigating the ongoing supply chain disruptions.
• 43% cited consistent on-time delivery as most important, 42% cited increasing consumer visibility regarding inventory as most important, and 41% cited maintaining/optimizing fulfillment options like curbside pickup and delivery as most important.

Other initiatives include increasing manufacturing operations and nearshore suppliers, and returning to sustainability programs, many of which were paused during the pandemic. Thirty-nine percent of respondents plan to seek out more sustainable upstream operations, and 38% plan to offer flexible delivery windows for online orders to maximize sustainability throughout the supply chain. This will align with the survey’s findings that 86% of consumers are willing to delay deliveries if it’s more sustainable.

“Even with global supply chains experiencing significant disruptions, businesses remain committed to sustainability,” said Hong Mo Yang, senior vice president and general manager, manufacturing sector at Blue Yonder.