A recent IDC study commissioned by Kinaxis highlights the sluggish pace of progress in supply chain flexibility and resilience, with a mere 17% of companies able to react to disruptions within a day.
Supply Chain Resilience Stagnates
The quest for agile and resilient supply chains is proving to be a slow journey, as revealed by a global study conducted by IDC and sponsored by Kinaxis. The research indicates that the average time taken by companies to respond to supply chain disruptions is approximately five days, a delay that significantly impedes efforts to enhance resilience and risk management. Despite this, there is a sense of optimism regarding the future role of supply chain orchestration tools.
Discontent with Response Times
The survey, which gathered insights from 1,800 supply chain decision-makers, paints a stark picture: a vast majority are grappling with maintaining agility in their operations amidst continuous disruptions from geopolitical tensions, natural disasters, and market volatility. Kinaxis reports an alarming average response time of five days to crises, although this varies across industries. For instance, 28% of oil & gas sector respondents can react within 24 hours, outperforming the medical devices & pharma and aviation sectors, which stand at 15% and 14% respectively.
The Promise of Orchestration Tools
John Sicard, President and CEO of Kinaxis, emphasizes the critical role of supply chains in determining organizational success, as evidenced by the survey results. He advocates for the adoption of advanced, AI-driven orchestration tools that promote transparency, agility, and collaboration, positioning chief supply chain officers as key figures in navigating future challenges.
The sentiment across various regions is one of dissatisfaction with current capabilities to manage and respond to supply chain disturbances. Yet, there is a strong belief in the transformative potential of improved orchestration tools, with 97% of respondents agreeing that these tools could have a moderate to significant effect on supply chain efficacy.
Sector-Specific Resilience and Plans for Tech Adoption
The manufacturing sector reportedly exhibits the highest resilience, with 47% of respondents affirming this stance. In contrast, the retail and aviation sectors are perceived as less resilient. Notably, 42% of consumer products sector respondents consider their supply chain orchestration to be mature, the highest among all industries surveyed.
Looking ahead, 25% of respondents are considering adopting new technologies within the next year to bolster resilience, with 33% expressing interest in platforms featuring AI or GenAI capabilities. While 63% view their supply chain as a competitive edge in the forthcoming year, confidence wanes when projecting three years into the future.
Lastly, the study reveals that 37% of respondents cite the challenge of identifying an appropriate vendor solution as the primary obstacle to implementing a supply chain orchestration application.
