Survey: climate of disruption prompts businesses to invest in solutions

U.S.-based supply chain executives say their businesses saw vast disruption over the past year, but a majority think their supply chains are reliable enough to withstand the pressure, according to a survey from supply chain software vendor Blue Yonder.

The vast majority (87%) of businesses report experiencing supply chain disruptions within the last year, with over half (52%) citing customer delays as the most frequent outcome. But most respondents (62%) indicated their supply chains were reliable enough to withstand the pressure, the company said in its “2023 Supply Chain Executives Survey.”

Not surprisingly, inflation remains top-of-mind for supply chain leaders. The survey found that executives reported increased costs for raw materials (43%), inventory (15%), transportation (14%), and labor (14%). As a result, nearly half (48%) of respondents reported shrinking profit margins over the past 6 months.

To cope with those hurdles, supply chain executives are seeking out solutions to handle disruption, led by investments in technologies such as warehouse management systems (44%), order management systems (39%), supply chain visibility tools (36%), and transportation management (30%). And Blue Yonder says those investments are paying off, with over half (54%) reporting improved efficiencies, 42% reporting fewer disruptions, and 39% reporting revenue growth.

According to Blue Yonder, those numbers suggest that the shift toward omnichannel commerce and fulfillment has not yet reached its conclusion, as business leaders still see opportunity to improve their processes.

“Business leaders have come to expect the unexpected,” Chirag Modi, corporate vice president, Industry Strategy – Supply Chain Execution at Blue Yonder, said in a release. “After the initial supply chain shock in 2021, organizations sprang into action and invested in tools and technology that would help them preempt and weather the storm. More than half (52%) of respondents have increased their supply chain investments in the last year, with 38% reporting investments of at least $10 million. Most (56%) of these investments are going toward technology.”

Finding and keeping qualified labor is another investment area, as businesses increasingly work to stay fully staffed during a period of historically low unemployment rates. The survey found that 42% of businesses executives reported increased investments in their workforce, up from 40% in 2022. And fully 87% of organizations have implemented new initiatives to stay competitive in today’s tight labor market, with 51% offering more competitive pay and bonus structures and 40% creating more flexible scheduling options.

“Today’s labor market and the substantial skills gap in supply chain management have pushed organizations to double down on training and overall employee experience,” Hong Mo Yang, senior vice president, Industry Strategy - Manufacturing at Blue Yonder, said in a release. “Modern supply chains are grounded in cutting-edge technology. To take full advantage of industry-leading data-intensive tools, business leaders must pull out all the stops to ensure their teams are supported, intellectually stimulated, and appropriately compensated.”

The study also covered rising investment in sustainable operations and in artificial intelligence and machine learning.

Blue Yonder collected responses from April 10 to 11 from more than 300 C-suite and senior executives across manufacturing, retail, 3PL, transportation, planning and warehousing, with responsibility for supply chain and manufacturing operations in the U.S.