SC transparency challenges manufacturers

Manufacturers around the world continue to be challenged by a lack of transparency in their supply chains, according to the 2014 KPMG Global Manufacturing Outlook report. Forty percent of respondents admit they lack visibility across their extended supply chain, with 33% saying it is due to either inadequate IT systems or a lack of skills. It is twice the number of respondents in 2013 who admitted that they lacked visibility across the extended supply chain. The findings could, however, be a reflection of greater understanding of the need for supply chain visibility. Around 20% of respondents in the 2014 survey claim to have complete visibility (up from 9% in 2013). There is, however, room for improvement. “The findings in this year’s GMO suggest that most organisations are currently focused on just a fraction of the benefits that data and analytics could offer,” says Mark Toon, global leader of data and analytics. “Few organisations fully understand the huge potential that resides within their data. “Fewer still are making the right changes to their business strategy to take advantage of that potential. “For example, the emergence of the ‘internet of things’ allows most manufacturing, supply chain and other equipment to become sensor-enabled which, in turn, generates huge amounts of new data on everything from the performance of the equipment through to its timing and location. “Organisations that manage to harness that data and then use sophisticated predictive and prescriptive analytics to optimise their processes in near real-time will reap significant rewards, such as dramatically reduced working capital and lower exposure to risk. “Those that are not able to harness their data in this way will be at a major competitive disadvantage,” he says. Manufacturers are also seeing their logistics providers more as business partners, according to Ralph Canter advisory managing director at KPMG in the United States. “Entering new markets, increasing productivity, sharing technology and integrating the supply chain all require some level of partnership with outside organisations and the adoption of more collaborative business models to achieve success.” “You simply can’t build the type of relationship you need to share real-time data without trust,” added Osamu Matsushita, KPMG’s industrial manufacturing leader for Japan.