Supply Chain (CONT’D FROM PAGE 37)
operations, the majority of respondents (60 percent) plan to implement advanced order management systems as their top strategy over the next two years. As supply chain leaders work to innovate their supply chains, sustainability continues to be a point of focus for many. Among respondents listing sustainability as an ac- tivity their organization is pursuing in the future, the top three focus areas included logistics (50 percent), sourcing of components (41 percent) and/or raw materials, and sup- plier relationships (41 percent). Amidst a variety of challenges, including rising costs and escalating customer demands, RRD’s report shows that the majority of leaders are looking to overhaul their supply chain. The data showed top reasons for re-engi- neering included customer demand for a wider range of products (43 percent of those re-engineering), rising trans- portation costs (42 percent), and enhanced supply chain visibility and control (42 percent). Supply chain leaders also shared that their top obsta- cles to supply chain re-engineering include high upfront costs, potential disruption to their current operations, and integration challenges with existing systems. Outsourcing is becoming a strategic tool for organiza- tions seeking to increase speed, scale, and better quality. Over the next two years, 63 percent of respondents ex- pect their organization to outsource more of its production processes. Speed is the primary reason top-performing companies outsource, though concerns over rising mate- rial costs and quality control remain prominent.
ruptions are prominent concerns, the report found that in- flation and price fluctuations stand out as what managers consider their biggest challenges for the near future. Supply chain leaders are responding to risk by imple- menting more conventional diversification strategies, including: • Developing new relationships with alternative suppli- ers (69 percent of respondents) • Increasing sourcing from domestic suppliers (67 percent) • Dual sourcing with suppliers who are geographically dispersed (52 percent). To proactively manage risks, nearly half (48 percent) of respondents report that they are “constantly” updating their formal evaluation of supply chain risk. Artificial Intelligence (AI) is gaining traction, but RRD’s latest report finds supply chain leaders are investing more in other technologies, including real-time visibility, scan- ning codes, the Internet of Things, and predictive analyt- ics. When leveraging AI, decision-makers reported using the technology in their supply chain activities for purposes including: supply forecasting (59 percent of respondents using AI); visibility and tracking (56 percent); and optimiz- ing operations (56 percent). For 2025, 57 percent of respondents also reported con- sidering the use of AI for demand forecasting to enhance kitting. To improve the responsiveness of their fulfillment
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October 7, 2024
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