Digital transformation has become a crucial focus for supply chain management across various industries. According to a recent Maersk survey conducted in collaboration with Reuters, digital supply chain transformation is a high priority for 48% of organizations and a top priority for 27%.
Despite this, only 12% of respondents believe their organizations’ technology investments fully meet their supply chain needs. Merely increasing digital investments will not yield the desired results unless accompanied by developing capabilities that can effectively leverage those investments.
Supply chain challenges
At the start of 2024, European businesses are more optimistic than the previous year, anticipating increased demand for goods and fewer major disruptions. In 2023, supply chains faced numerous disruptions, resulting in unexpected costs for many businesses, with 61% reporting greater impacts on their balance sheets than anticipated.
Source: Maersk and Reuters
Challenges such as low visibility, siloed data, collaboration difficulties, and limited forecasting capacity amplified these disruptions. Consequently, digital supply chain transformation has become a top or high priority for three-quarters of European supply chains. This focus makes supply chain monitoring, tracking, and visibility solutions the leading technology investment category for 2024. Investments will also support sustainability initiatives, as many European organizations currently struggle to measure emissions within their supply chains.
Visibility rapidly drops away at higher tiers for European firms. While 99% have at least partial visibility for their own inventory and warehousing, that falls to 32% for tier two suppliers and 20% for tier three suppliers. Higher-performing organizations exhibit more collaborative cultures, superior data management, a stronger emphasis on digital transformation, and deeper visibility into their supply chains.
Sharing information and collaborating
High performers excel at sharing information and collaborating with partners. While 95% of high performers report efficient internal data sharing, only 54% of other respondents say the same. Regarding external partners and suppliers, 80% of high performers indicate efficient data sharing compared to 59% of others. Additionally, high performers are 25% less likely to struggle with fostering a collaborative culture. The leading strategy for enhancing supply chain resilience, cited by 52% of respondents, is improved data sharing and communication.
Source: Maersk and Reuters
It’s all about data
Over three-quarters of respondents report that forecasting, analytics, supply chain visibility solutions, supply chain management software, and process automation have enhanced the resilience of their supply chains. The top three technologies prioritized for investment in 2024 are supply chain monitoring, tracking, and visibility solutions (68%), analytics (51%), and forecasting (47%). The priority for AI and machine learning has increased from 12% in 2023 to 36% in 2024, while the priority for analytics has risen from 37% to 51%.
Source: Maersk and Reuters
Effectively monitoring supply chains is increasingly vital within the context of ESG in the European consumer and regulatory environment. As expectations and requirements for sustainability in manufacturing and transportation continue to rise, investments in supply chain visibility have become more urgent than ever.
In 2024, European organizations cannot afford to remain passive. They must prioritize supply chain digital transformation, focusing on visibility, as a central component of their company strategy. This approach offers clear performance benefits by reducing the likelihood of delays, lowering costs, and enhancing the ability to meet market demands.
Source: Maersk and Reuters