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Firms use 'rule of thumb' to plan supply chains

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European manufacturers are failing to make the most of data and analytics tools to plan and segment their supply chains, according to a new report.

JDA Software Group and Warwick Manufacturing Group's (WMG) report the Supply Chain Segmentation: A Window of Opportunity for European Manufacturing found that only 18% of respondents took into account historic, present and future data in the supply chain planning process.

The report surveyed 100 manufacturing organisations across Europe to benchmark their supply chain segmentation practices.

Only 39% of respondents’ segmentation models were data-driven and 23% of organisations stated they prefer the use of “rules of thumb” to any kind of data-driven methodology.

“The survey highlights that the majority of organisations are not using dynamic or data-driven models,” said Hans-Georg Kaltenbrunner, vice president manufacturing industry strategy, EMEA at JDA.

“Indeed, more organisations are driving their supply chains forward by looking in the rear-view mirror, rather than looking at the road ahead.”

Kaltenbrunner said that as well as an over reliance on historic data, research suggests that some organisations may not have the capability to accurately navigate their supply chain along the business roadmap.

“A lack of analytics capabilities is widespread, along with a consistent end-to-end analytics approach,” he said.

This meant first movers would quickly gain a competitive advantage.

Twenty nine per cent of respondents said they implemented supply chain segmentation practices, in a top down manner – which the report said indicated that the strategic nature of segmentation is not being recognised in practice.

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