Dive Brief:
- Manufacturers are implementing new strategies to optimize inventory management, integrated planning and execution technologies to adapt to the "Amazon effect," according to a recent JDA Software study.
- The study found that of the 271 U.S.-based manufacturers surveyed, 51% are focusing on better "internal and external collaboration across the supply chain," 44% are prioritizing "demand sensing" to more accurately gauge and meet consumer expectations, and 41% are prioritizing inventory optimization.
- Manufacturers are attempting to become more like retailers by seeking full supply chain control, but only 18% of the manufacturers surveyed believe they have reached full supply chain maturity.
Dive Insight:
The big takeaway from JDA's study is manufacturers, relying less on retailers in a commercial landscape increasingly less codependent as e-commerce giants such as Amazon, demonstrating it's possible to control all operations yourself.
And that's what manufacturers want — more control and autonomy over their own operations. The study reveals the burgeoning attitude where companies believe they should be able to handle their own supply chain to better pursue their own interests.
Manufacturers seeking more control could put more pressure on retailers to differentiate in what services they offer, but what's likely going to happen is more companies will seek to solidify their own operations so losing a retailer, supplier, vendor or 3PL won't hit them as hard.
The Carillion bankruptcy is just one cautionary tale for companies along the supply chain not to become too codependent on each other for fear of negative ripple effects when one company falls.
Despite the study's statistic that 18% of manufacturers believe they haven't reached full supply chain maturity, the study also found 35% of manufacturers believe they will reach full maturity in two to three years, and 65% of those manufacturers consider supply chain digitization a top priority.
According to these stats, the manufacturing sector still has a way to go before obtaining full digitization and operational efficiency. But these manufacturers' resolve to streamline operations also signals a turning point: away from vendor-client relationships, and toward integrated business partnerships bolstered by technology.
