Organizations need real-time data insights, agility, and digitalization to mitigate risk and be successful, a new report finds.
Supply chains in 40% of multinational corporations were unable to cope with the crisis created by the pandemic, new research reveals.
The report, Real-time Intelligence and the Future of Supply Chains surveyed 320 enterprises in the manufacturing, transport, and logistics sectors and revealed that the global pandemic has dramatically changed attitudes toward risk.
Some 83% of respondents said they are more aware of supply chain risks, such as raw material shortages, manufacturing shutdowns, or transport blockages, than 12 months ago. The pandemic has made them wake up and realize they need more speed, agility and innovation to cope with change, the report said.
Building resilience and sustainability into supply chains through digitalization and real-time data insights is a priority for transformation strategies and essential to the survival of many companies.
Reinforcing the supply chain
Nearly eight in 10 said they have accelerated their digital supply chain strategies. In addition, almost half of the companies surveyed said they are now looking at overhauling risk procurement and risk management strategies within the next two years.
Automation is also set to increase in prominence to handle rapidly changing demand levels. Currently, 42% of enterprises surveyed said they are using automation to manage risks, and this will double over the next two years, according to the report.
Two out of five respondents said their supply chain could not cope at the height of the crisis. Technological enablers, including artificial intelligence (AI), cloud, 5G, and big data analytics will now play important roles in strengthening supply chains through enhanced planning and execution, the report said.
Collecting and sharing real-time data will improve efficiencies and visibility across the entire supply chain, while supporting relationships between suppliers and manufacturers for smart decision making.
“The global health emergency has made organizations accept the fragility of their ecosystems,” said Kristof Symons, executive vice president, international, Orange Business Services, in a statement. “Critical gaps must be plugged to ensure end-to-end visibility on a global scale and minimize the risk to the business.”
Digital technologies and capabilities are the key in allowing enterprises and their partners to reimagine their supply chain securely, he added. “Digitalization and data collection will also be primary enablers to become more sustainable and save costs as well as the planet.”
Reenergizing sustainability programs
Although the COVID-19 crisis has pushed sustainability down the corporate agenda, 59% of respondents said that not running an ethical and sustainable business was a significant business risk that could impact their bottom line. Smart factories can realize a 30% saving in energy costs, for example, according to the survey.
Moving forward, 85% of respondents said their business is investing to become more sustainable. This includes new data collection technologies to give better insight into sustainability metrics and managing and controlling factors such as energy usage.
“The pandemic will stop, somehow. But climate change, sustainability – those trends and risks are here for the next few decades,” said Erwin Verstraelen, CDO and CIO at the Port of Antwerp, in a statement. “For example, the European Green Deal is going to put more pressure on all stakeholders to identify the origins of emissions and minimize their environmental footprint. The supply chain is an important element of that.”
If actions by organizations follow their ambition, digitally driven sustainability management programs will become near universal within two years, the report said.
The report surveyed 320 senior executives from multinationals across 18 countries between August and October 2020. The survey was commissioned by Orange Business Services by independent research group Longitude, a Financial Times company.