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Industries Still Must Tighten Up Their Supply Chains


Disruptions of supply chains are hopefully temporary. Yet, they point to data and analytics gaps hindering the ability to connect products with consumers.

The COVID-19 crisis that erupted last year really made a mess of even the best-laid supply chains. Toilet paper and hand sanitizer disappeared off of shelves in the early stages, but lately, there have been glitches in everything from microprocessors to drugs to aluminum cans to car parts to cat food.

Many of these are, hopefully, temporary hiccups. Yet, they also point to untimely data and analytics gaps that hindering the ability to connect products with consumers. Poor integration across supply chains resulted on average losses to the tune of half a mullion dollars, along with lost orders, stemming from issues with integrating data and applications. These losses increased between 2019 and 2020. Making matters worse, most executives admit they do not have sufficient visibility into or control over what’s really happening with their supply chains.

See also: 5 Benefits of Having an IoT-Enhanced Supply Chain

These findings come from Cleo’s “2021 State of Ecosystem and Application Integration Report,” which finds the COVID-19 crisis exacerbated glaring integration gaps in supply chain processes. At least 74% of companies lost more revenue due to integration issues in 2020 than in 2019. Adding to the challenge, 88% admit they lost orders, and more than half said they lost more orders in 2020 than in the previous year. One in four, 25%, even admit they simply don’t know how many orders they are losing.

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When asked how much annual revenue was lost in 2020 due to poor integration, 66% of executives said their companies lost up to $500,000, up significantly from 43% the prior year, the survey finds. One in 10 estimates they lost more than $1,000,000 due to integration issues in 2020.  

At the root of these issues is companies do not have sufficient visibility into what’s really happening with their supply chains. Barely 50% of companies indicated they could access supply chain information to glean business insights. Adding to the challenge is that most companies added new supply chain partners in 2020, and while onboarding generally happened faster than in the previous year, the pace woefully lagged what the business needed, contributing to a negative impact on revenues.   

The uncertainty and disruptions created by COVID, along with legacy systems and insufficient application integration capabilities were key reasons companies encountered difficulty onboarding new partners.

This all took place in the face of accelerated movement into the cloud in efforts to improve visibility, control, analytics, and real-time insights. Having gained a new perspective on how outdated integration technology negatively impacts revenue, 96% of companies say they’ll focus more on cloud migration and digital transformation in 2021. In addition, 66% percent said they increased their digital business capabilities, such as e-commerce and digital supply chains. 


About Joe McKendrick

Joe McKendrick is RTInsights Industry Editor and industry analyst focusing on artificial intelligence, digital, cloud and Big Data topics. His work also appears in Forbes an Harvard Business Review. Over the last three years, he served as co-chair for the AI Summit in New York, as well as on the organizing committee for IEEE's International Conferences on Edge Computing. (full bio). Follow him on Twitter @joemckendrick.

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