Supply chain digitisation lacking globally: Capgemini

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IANS | 06 Dec, 2018
While many organisations across the world consider supply chain digitisation to be one of their top three corporate priorities, most are still struggling to get projects beyond the testing stage, says a new study from French technology services major Capgemini.

Over 45 per cent of the organisations from India in the survey said they have supply chain digitisation as one of their top three priorities, according to the study titled "The digital supply chain's missing link: focus".

"While most large organisations clearly grasp the importance of supply chain digitisation, few appear to have implemented the necessary mechanisms and procedures to turn it into a reality," Dharmendra Patwardhan, Head of the Digital Supply Chain Practice for Business Services at Capgemini, said in a statement on Thursday.

"Digitisation of the supply chain will only be achieved by rationalizing current investments, progressing on those that can be shown to drive returns, and involving suppliers and distributors in the process of change," Patwardhan added.

Over three quarters (77 per cent) of companies said their supply chain investments were driven by the desire for cost savings, with increasing revenues (56 per cent) and supporting new business models (53 per cent) also frequently cited.

The organisations surveyed have an average of 29 digital supply chain projects at the ideation, proof-of-concept or pilot stage.

Just 14 per cent succeeded in scaling even one of their initiatives to multi-site or full-scale deployment.

However, for those that achieved scale, 94 per cent reported that these efforts led directly to an uplift in revenue, the findings showed.

For the study, the Capgemini Research Institute surveyed supply chain executives from around 1,000 organisations across consumer products, retail and manufacturing industries, about their existing digital supply chain initiatives.

Eighty percent of these organisations reported revenue of more than $1 billion in the 2017 financial year.

According to another research from the Capgemini Research Institute released in October this year, the return on investment (ROI) on automation in supply chain and procurement averaged 18 per cent, compared to 15 per cent for initiatives in human resources, 14 per cent in information technology, 13 per cent in customer service and 12 per cent in finance and accounting.