Manual processes put customer relationships at risk

October 1, 2010   by PLANT STAFF

SAN DIEGO, Calif.: A US survey of manufacturers and logistics executives reveals concern over loss of customer relationships in uncertain economic times and the need to address a reliance on manual processes, seen as a serious black hole in the management of volatility.

Sterling Commerce, an IBM company based in Dublin, Ohio that helps companies collaborate within their supply chains, said manufacturing and logistics executives are focused on the risks associated with a loss of customer relationships. They plan to invest in smart network capabilities that include more collaborative risk sharing, supply chain synchronization, and secure, compliant B2B commercial interactions.

“Manufacturers know they need to be faster to new markets, to innovate with new products and to deliver on order commitments, but they also have to have very lean, agile supply chains,” said Richard Douglass, a Sterling Commerce global manufacturing and logistics industry executive. “Building a smarter dynamic business network is at the centre of addressing these challenges, and this survey highlights that manufacturers face a number of obstacles in the collaboration needed for that network.”

He said respondents identified customer demand and supplier risks as key information black holes, complicated by still very ad hoc and manual collaboration upstream with suppliers and downstream with customers.

The survey, conducted by Edge Research, investigated the business concerns of 301 US information technology, sales and supply chain decision makers in the manufacturing and logistics sectors. Here are some highlights:

• 36% expressed concern about the risk of slipping back into a recession. Primary concerns were the risk of losing customers/customer volume (46%) and demand/channel volatility (41%).

• 82% indicated that managing volatile demand, specifically unexpectedly accelerating or decelerating demand, would be a priority in 2011.

• The most prominent information “black hole” among companies was real-time demand (39%), followed by supplier issues/problems (34%).

• For both customer and supplier collaboration, half the respondents still use manual processes for monitoring changes, exceptions and disruptions to planned activity.

• On the customer side, 24% had implemented highly automated processes for “visibility of order and shipment status” and 18% had done the same for “visibility of inventory and demand of their key customers’ customers”.

• On the supplier side, “visibility of order and shipment status” was implemented as a highly automated process for 24%, with less than 15% indicating they had implemented highly automated processes for the other areas of collaboration.

• 40% intend to implement supply chain synchronization solutions that provide seamless customer experience from the moment an order is placed, via whatever channel, to its ultimate fulfilment. Supplier relationship management, transportation management systems and multi-channel eCommerce are key components of any supply chain synchronization solution.

• 35% will apply risk-sharing solutions like vendor managed inventory and available-to-promise capabilities that give them more precise views of inventory at multiple levels in the supply chain.

• 32% will apply process management and analytics solutions that enhance multi-enterprise process management, such as supply chain analytics and automated business-to-business (B2B) integration.

• 31% will use secure network solutions that protect transfer of sensitive data and intellectual property, as well as that ensure compliance with ever-changing customer and regulatory mandates.

• Six in 10 decision-makers are currently implementing cloud solutions, with just over one third (36%) of respondents implementing two or more cloud solutions. Survey findings show that order management, supply chain visibility and warehouse management are the most commonly used cloud solutions among manufacturers.

Click here for a copy of the survey.

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