the state of supply chain management 2019 introduction · the state of supply chain management 2019...

The State of Supply Chain Management 2019 measures the pulse of Supply Chain Management

in Australia.

In this 21st century “companies don’t compete, supply chains compete”!

Today’s Supply Chain Managers are increasingly being asked by their CEOs to be more strategic

and help generate more value within their organisation. A greater investment than ever before is

being made within the supply chain in order to increase efficiencies; be innovative; achieve a

competitive advantage and deliver a better customer experience.

Along with this, more and more Australian companies will compete on a global basis and will

have supply chains that span across the world. In fact, Australia’s competitive position will

increasingly depend on your organisation's supply chain management prowess.

Through this study, we will explore eight components to provide insight into the maturity of the

supply chain function:

1. Collaboration

2. Technology and Automation

3. Integration

4. Compliance and Regulation

5. Logistics and Distribution

6. Risk Management

7. Sustainability

8. Procurement

Please take just 25 minutes to participate in this survey and you will receive a free copy of the

study once compiled. It is a great way to benchmark your own supply chain practices!

Thank you to the UTS research team for assisting us in the preparation of this 2019 survey.

Together, we look forward to sharing the results and insights with you.

ASCI Research

Introduction

The State of Supply Chain Management 2019

1

Participant Summary


1. Indicate your job title:*

Senior Manager (CEO/CFO/CIO/CSO/VP/GM/Director)

Department Manager

Functional Manager

Other (please specify)

2. Indicate your key areas of responsibility in relation to supply chain:*

Supply Chain Management

Planning and Scheduling Management

Inventory Management

Logistics Management

Transport Management

Procurement or Supply Management

Operations Management

Sales, Marketing or Demand Management

Customer Service

Finance and Accounting

Shipping and Receiving

Human Resources Management

Information Technology Management


2

3. Indicate the key industry sector for your organisation:*

Agri-food

Aerospace and Defence

Automotive

Finance, Banking and Insurance

Chemicals, Petroleum, Oil and Gas

Consumer Goods

Defence

Education

Engineering and Construction

Healthcare

High Technology Manufacturing, Systems and Solutions

Industrial Machinery, Parts and Components

Life Sciences (Pharmaceutical)

Media

Mining and Resources

Professional Services

Public Sector (Governments, NGOs)

Retail and Wholesale

Sports and Entertainment

Telecommunications

Transport (Road, Rail, Sea and Air)

Logistics Services

Tourism

Utilities


4. What are the three primary supply chain goals in your organisation? (Number 1 to 3 in decreasing

order of priority)

Increase customer satisfaction and experience

Achieve sustainable distribution

Improve responsiveness

Increase innovation

Increase operational automation

Improve working capital efficiency

Reduce logistics cost

Improve delivery reliability

Improve relationships with 3PL/4PL providers

Expand the business into new markets

Improve contribution margin

3

5. What are your major supply chain challenges? (Number 1 to 3 in decreasing order of priority)

Containing cost increase (raw material cost, labor cost)

Meeting customer expectation on reduced transit times

Lack of supply chain process visibility

Internal resistance to change

Increasing local or global competition

Lack of relevant supply chain data

Adapting to changes in customer expectation on demand

Unsophisticated service providers and quality

Long lead time items and components

Developing a reliable logistics infrastructure

6. How many full-time equivalent employees does your organisation employ?

7. How many years has your organisation been in operation?

8. Which one of the following best describes the organisation where you work?

Private Sector

Public Sector

Charity or Not For Profit

9. What was your organisation's annual turnover last financial year as at 30 June 2019? (If your

currency is not in AUD please estimate or convert)

Under $10m AUD

Between $10m and $20m AUD




Over $500m AUD

10. How would you describe the geographical scale of your organisation?

National

Global

4

11. Where is your organisation's head office located?

12. How many intermediary countries does your supply chain transition through?

1-3

4-6

7-9

10-13

14-16

17-19

20 and above

Unknown

13. Was your organisation involved in a franchising agreement during the year ended 30 June 2019?

No franchising agreement

Yes, franchisee (i.e. operated a franchisee)

Yes, franchiser (i.e. controlled a franchise system)

14. What was the percentage of foreign ownership of your organisation as at 30 June 2019?

0%

Greater than 0% and up to 10%

Greater than 10% and up to 50%

Greater than 50%

5

For supply chains to operate seamlessly on an end-to-end basis, there will be a requirement for

business functions to be fully integrated and aligned. In order to achieve this end-to-end

integration across supply chains information sharing, decision synchronisation, and incentive

alignment, within and across supply chain domains will be required. This is not possible without

true collaboration between stakeholders as it will facilitate effective conduct of business

activities, enabling teams to work collaboratively on different projects; thus making efficient use

of tools, systems and data.

Collaboration


15. Is your production plan integrated with other plans such as marketing, sales, inventory and

distribution?

*

Yes

No

Currently being developed

16. In the future, there's the potential to increase communication across the wider supply chain through

a centralised housing of data across multiple systems, allowing for uniform and complete tracking of a

product's full lifecycle. If you were to implement such a blockchain system, how would your organisation

most benefit? (Select all that apply)

*

Traceability - visibility into all product movement

Collaboration and data sharing with all partners

Satisfy regulatory requirements

Ensure ethical compliance

Financial monitoring security of products (counterfeiting,

theft)

Condition monitoring (temperature)

None of the above


6

17. What motives have underpinned your organisation's formal and informal collaborations with other

organisations? (Select all that apply)

*

Sharing costs

Acquiring missing knowledge

Accessing tacit knowledge and expertise in the organisation

Utilising complementary resources

Sharing risk related to development of new technology

Regulatory and compliance pressure techniques


Positively Neutrally Negatively N/A

Consumers

Other divisions within

your organisation as

suppliers

Second tier suppliers

Third tier suppliers

Competitors

Universities and

Research institutes

Government

Agencies and

Standards Authorities

Consultancy firms

18. How would you rate the outcome of collaboration with the following parties in helping to grow your

supply chain?

7

Low Medium High Very high N/A

Customer

segmentation

Service requirements

Profitability

Demand planning

Product differentiation

Supply sources to

reduce ownership of

materials

Multi-level decision

making

Channel spanning

performance measures

19. How would you rate the importance of the following practices in your organisation.

20. Please indicate the level of collaboration that exists in your organisation between third party

suppliers, competitors and end customers. (Estimate only)

0 Low 10 High

21. How would you rate the value of collaboration to the success of your organisation?

Useless

Helpful in some circumstances

Essential business practice in selected instances

Essential across the board

8

Supply chain management is evolving into a hybrid discipline, with the use of digital

technologies and data analytics. The growth of digital technology has seen a shift from linear

supply chain to a more complex and dynamic one where the suppliers, distributors and

consumers facilitate collaboration and knowledge exchange allowing for greater innovation and

efficiencies through the value chain.

Professor Booi Kam from RMIT University predicts, the use of technology will provide flexibility

to the customers but create complexity for businesses, as it means a fundamental change to the

way they think and operate (Fergusson, 2017).

As such, organisations are increasingly integrating the skills of IT and engineering with the

general business practices and operations to achieve greater business efficiencies, reduce

waste, lower costs, boost innovation and increase market competitiveness.

Technology and Automation


22. Which of the following have you currently implemented within your supply chain? (Select all that

apply)

*

Advanced analytics

Mobile applications

Cloud-based applications

Radio-frequency identification (RFID)

Machine learning

3D Printing

Automation and robotics

Sensor technology and driverless vehicles and drones

Automatic identification

Blockchain

Artificial intelligence

Internet of things (IOT)

Big data

Augmented reality

Virtual reality

Digital twin (a computerised version of a physical asset)

Crowdsourcing

None of the above

Other (please list)

9

23. Which of the following do you intend to start implementing over the next 12 months? (Select all that

apply)

*

Advanced analytics

Mobile applications

Cloud-based applications


Machine learning

3D Printing

Automation and robotics

Sensor technology and driverless vehicles and drones

Automatic identification

Blockchain

Artificial intelligence

Internet of things (IOT)

Big data

Augmented reality

Virtual reality

Digital twin (a computerised version of a physical asset)

Crowdsourcing

None of the above

Other (please list)

Low barrier Medium barrier High barrier

Lack of clear

business case to

justify the

investment N/A

Legacy infrastructure

and systems

Lack of internal skill

Lack of access to data

24. To what extent are the following factors considered barriers to a fully functioning digital supply chain

in your organisation?

*

25. Which statement best reflects your organisation's overall current suply chain digitisation status?*

We have a holistic digitisation strategy

We have a piecemeal digitisation strategy

We are developing a digitisation strategy

No real digitisation strategy

26. Please indicate the level of automation in your organisation. (Estimate only)*

0 Low 10 High

10

27. Where is technology expected to have the greatest impact to your organisation? (Number 1 to 3 in

order of priority)

Predictive analytics and lead indicator analysis

Process optimisation

Cost reduction

Create new business opportunities

Competitive advantage

Better targeted marketing

Product customisation

Reducing stock and wastage

Reduce inefficiencies

Replacement of manual tasks

Improve productivity

Improve supply chain collaboration

28. What activities are currently being undertaken to prepare for new technology?

Hiring of new staff

Upskilling internally – training, research and development

Informal ad hoc research

Establishing partnership with specialists

Formal research and investigation – white papers or

industry reports

Contracting out development and implementation

No investment


11

29. What are the biggest concerns of emerging technology to your organisation? (Number 1 to 3 in

order of priority)

Security and hacking

Loss of jobs

Societal changes – gap between rich and poor

Ensuring technological uptime

Investments in new technology

Operating costs

Return on investment

No concerns

30. Please indicate the extent to which your organisation uses analytics to maximise the value of

information in the organisation. (Estimate only)

0 Low 10 High

31. Would you like to find out how using digital technology and data analytics can help achieve greater

business efficiencies and increase market competitiveness?

*

Yes

No

12

An integrated supply chain can be defined as an association of customers and suppliers who,

using management techniques, work together to optimise their collective performance in the

creation, distribution, and support of an end product.

The ability for an organisation to efficiently transfer information and knowledge across

departments, offices and global locations provides a competitive advantage to the business.

More specifically, advances in information integration have enabled supply chains to decrease

order cycle times, increase agility to respond to customers’ demands and increase

organisational profitability.

The main drivers of supply chain integration are listed by Handfield and Nichols (1999, p. 5) as:

the information revolution

increased levels of global competition creating a more demanding customer and demand

driven markets

the emergence of new types of inter‐organisational relationships

We seek to identify key benefits of improvement information integration as well as what's

restricting organisations from improving their information integration.

Integration


32. Select the statement that best describes the breadth of your organisation's integration of

information?

*

Information flows from supplier to our organisation and

through to customers

Information flows from supplier to our organisation but is

reconfigured for delivery to customers

Information is received from supplier, reconfigured to our

organisation and flows directly to customers

Information is reconfigured each time between supplier, our

organisation, and our customers

None of these

13

33. Which of the following statements best describe your approach to a demand-driven supply network?*

We don't have a demand-driven strategy

We have implemented a pilot project with a demand-driven

focus

We have implemented more than one project with a

demand-driven focus

Ours is a totally supply driven network


34. What business benefits do you feel you would be able to better address through improved

integration of business information? (Select top 3)

Increased cost competitiveness. Organisations are looking to reduce costs by improving the synergy and

efficiency within their supply chain.

Shorter product life cycles. As technology advances and there is an increase in competition many products

are experiencing shorter life cycles.

Faster product development cycles. Introducing new products at the start of the product life cycle is often

rewarded with an increased market share which helps increase return on investment.

Globalisation and customisation of product offerings. Consumers are demanding more customised

products and now have access to these globally.

Higher overall quality. Increasing customer expectations and tougher competition is leading to an increase

in quality.

Reduced costs - lower inventory in the supply chain less expedited freight.

35. The complexities, risks and costs of fully integrating business information sometimes can be

substantial therefore most integration efforts have been limited in scope. What do you feel would restrict

you from fully integrating business information? (Select top 3)

*

Risks of production stoppages

Time required for training, managing and supporting the

integration activities

Investment in supply chain integration software and other

required information systems

Opportunity cost – what other activities will be forfeited or

delayed from undertaking this activity?

Fear of too close relationships, difficult to exit

36. Please indicate the level of information integration across departments, offices and global locations

within your organisation. (Estimate only)

*

0 Low 10 High

14

37. What are the key drivers of supply chain integration to your organisation?

Meeting the market demand or change of consumer demands

Competition from other companies

Entry into new markets

International laws and regulations


38. What are the barriers of supply chain integration to your organisation? (Select all that apply)

Lack of management skills

Negative attitude towards change

Poor knowledge management

Risk of information sharing, privacy across organisations

Lack of experience in information sharing

Multiple independent information systems

IT supports only some departments

Lack of willingness to invest in supply chain improvement

Unable to invest in supply chain improvement

Lack of staff training

Lack of top management support

Strategic misalignment

Geographical dispersion


15

Supply chain risks have exponentially grown for many organisations within the global economy

due to the reliance on third party suppliers. As such, organisations are now facing a heightened

risk of compliance breakdowns which can ultimately damage the organisation’s reputation and

result in legal and financial consequences. Supply chain compliance refers to organisational

adherence to established guidelines and requirements that relates to risk domains along the

supply chain continuum, as well as to an organisation’s ability to meet or exceed the

expectations of its stakeholders with regard to sourcing, manufacturing and delivery of

products.

Compliance and Regulation


Low concern Medium concern High concern N/A

Health and Safety

Violations against

environmental

regulations

Conflicts of interest

Falsifying documents

and records

Not delivering goods

and services that live

up to customers'

expectations

Deliberately miss-

communicating function

and features of product

or service

Multiple levels/tiers of

subcontrary


39. Which areas do you believe are of highest concern when looking to ensure that you are compliant

and meet regulatory requirements?

16

40. Although the availability of digital technologies is helping improve transparency to identify any

compliance and regulatory concerns, do you believe that industry regulations are actually stopping you

from migrating to the cloud?

*

Yes No


41. Please indicate to what extent you believe that your organisation adheres to full compliance and

regulations (Estimate only)

*

0 Low 10 High

Yes No

Labour and

employment

Business ethics

42. Does your organisation require its suppliers to be in compliance with labour/employment and

business ethics laws and regulations?

Yes No

Labour and

employment

Business ethics

43. Does your organisation communicate information about its labour, employment and/or business

ethics performance, practices and expectations to its suppliers?

Yes No

Labour and

employment

Business ethics

44. Does your organisation have a policy or commitment statement affirming the organisation’s

commitment to compliance and continuous improvement in the following areas?

Yes No

Labour and

employment

Business ethics

45. Does your organisation perform a periodic, top-level assessment of the status of labour/employment

and business ethics programs? Including progress toward meeting improvement objectives, results of

audits, and completion of corrective actions, in order to identify improvement opportunities?

17

46. Which of the following information does your organisation collect from its suppliers?

Materials content

Regulatory status

Non-regulatory status

Materials origin

Greenhouse gases

None


18

With an increase in customers, greater focus is being placed on 3PL/4PLs to help better service

demands and expectations. Third party logistics assists to supply right product to right

consumers' in right quantity. Third party logistics service providers are capable of making the

flows of goods across the supply chain to become effective because they possess the know-

how to coordinate logistics affairs. The most significant tool of logistics service provider is

information technology that enhances competence while decreasing cost.

Information is at the heart of a 3PL/4PL relationship, having the potential to transform

organisational operational effectiveness. Successful relationships are based on working

strategically and sharing information and data so as to optimise the logistics network. By

making the most of information, organisations can: transform their operations; make better

decisions; bring their products and services to market more quickly and efficiently; and gain the

intelligence and insight to compete in a volatile and complex economic environment.

Logistics & Distribution


19

47. What is most important to you when selecting a 3PL/4PL provider? (Select top 5)

Lowest cost

Product tracking and visibility

Shortest delivery time

Ability to provide insightful data on product (temperature, time sitting)

Guaranteed delivery date and time

Providing good customer service

Seamless cross idle processing

Globalisation

Reduced asset base

Freight forwarding

Customs clearance

Import and export management

Domestic transportation

International transportation

48. Industry disruption from new entrants into the market is driving organisations to review and

transform their existing supply chain. How do you see 3PL/4PL providers being able to assist in helping

you transform your supply chain?

*

Provide real time data and analytics

Provide industry knowledge and insights into best practices

Supply chain experience

Improved communication and collaboration

None of the above


20

49. Supply Chain Managers are looking for added value from their 3PL/4PLs and this has often been

provided in the form of technology services. Where do you see the greatest value being provided to

your organisation by a 3PL/4PL provider? (Select all that apply)

Warehouse or distribution centre management

Planning transportation

Scheduling transport

Web portals for booking and tracking

Customer order management

Advanced analytics on blockchain

Flexibility of supply chain operation

Risk reduction

Global trade management (customs document

management)

Product visibility

Last mile delivery

Access to new technologies and methods


Electronic data interchange (EDI)


50. To what extent does your organisation utilise their relationships with 3PL service providers in the

development of their strategy rather than only seeing them as subcontractors? (Estimate only)

*

0 Low 10 High

51. What are the barriers to selecting 3PL/4PL service providers for your organisation?

Lack of trust and awareness

Poor transportation and communication infrastructure

Limited value-added services

Cost inefficiency

Diseconomies of scale

52. What are the information sources used by your organisation to identify 3PL/4PL service providers?

Directories published by professional logistics networks

Referrals in management magazines and journals

Advertising from 3PL/4PL providers

Recommendations from business partners or sister

companies

Referrals from consulting firms

Recommendations of the organisation’s personnel


53. Has the use of 3PL/4PL services changed for your organisation compared to last year?

Increased

Decreased

Stayed the same

Unknown

Do not use

21

Organisations need to consider the risk of third-party supply chain infrastructure disruption as a

critical risk to their own performance. The supply chain is vulnerable to the disruptions caused

by external events such as uncertain economic cycles, consumer demands, and natural and

man-made disasters but also the impact of changes in business strategy (Christopher, M., 2000).

Here we will identify which areas Supply Chain Managers need to monitor so as to reduce the

exposure of their supply chain to potential risks and to mitigate the impact of risk.

Risk Management


54. How many incidents occurred within your supply chain over the last 12 months that led to disruption

and negative impact upon your organisation?

*

0

1 - 5

6 - 10

11 - 20

21 - 30

31 - 39

40+

55. Which supply chain functions do you believe you need to build a contingency plan around? (Select

top 5 options)

*

Commodity prices

Concentration of customers

Concentration of manufacturing operations

Concentration of supply base

Reliance on small supplier base

Reliance on legacy technology

Skillset and expertise


22

56. What activity do you believe you need to undertake to become more flexible, resilient and agile in

order to reduce your supply chain risk? (Select top 5)

*

Establish and implement a business continuity plan

Develop a dual sourcing strategy

Develop a hedging or forward buying strategy

Increase inventory levels

Establish multiple distribution centres

Modernise the supply chain through automation

Improve business visibility through better collection and

analysis of data

57. Overall, how would you rate your organisation's response to risk in the supply chain decision

making?

*

Poor

Fair

Good

Excellent

58. To what extent do you believe that your organisation has a sufficient risk management program to

support its supply chain operations? (Estimate only)

0 Low 10 High

59. Which of these factors have most impact on your organisation’s supply chain decision-making?

(Select top 3)

*

Lack of information

Decision-making expertise

Lack of awareness of risk management

Lack of standardised approaches to decision-making

Inadequate technology systems


60. Which decision has more potential to create risk for supply chain managers? (Select all that apply)*

Network planning and optimisation

Product design

Outsourcing

Manufacturing

Product safety

Warranty and liability

Compliance


23

61. The decision-making risks in your organisation have an impact on: (Select top 3)*

Supply

Compliance

Profitability

Capacity to meet demand requirements

Brand image


62. What are the risks most likely to cause systemic supply chain disruptions to your organisation?

(Select top 5)

Conflicts and political unrest

Corruption

Border delays

Shortage of labour

Market change and demand shifts

Price volatility

Import and Export restrictions

Ownership investment restrictions

Currency fluctuations

Cyber attacks

Illicit trade and organised crime

Terrorism

Piracy

Natural disasters

Information and communication disruptions

24

63. What are the 5 most employed methods of risk avoidance and mitigation in your organisation?

Scenario planning

Business continuity planning

Industry benchmarking

Legislative compliance

Data and information sharing

Risk quantification matrix

Vendor compliance policies

Supply audit collaboration

Shaping new legislation

Government incentive programs

Professional certification and licensing

Business-led quality standards

Track and trace tools

Insurance

Training and education

Risk management program


25

Sustainable supply chain management is defined as “the management of material, information

and capital flows as well as cooperation among companies along the supply chain while taking

goals from all three dimensions of sustainable development, i.e., economic, environmental and

social, into account which are derived from customer and stakeholder requirements.” (Seuring

and Muller, 2008, pp. 1699-1710)

Sustainability is a collaborative process. There is only so much that any one business can do

about acting responsibly on behalf of the environment or society without involving its supply

chain and holding it accountable.

Sustainability


64. Does your organisation perform sustainability audits?

Yes

No

65. Does your organisation have a sustainability strategy for the organisation’s supply chain?

Yes

No

66. Does your organisation get your suppliers to provide you with sustainability information?

Yes

No

26

Yes No N/A

Responsible

consumption of

resources

Waste reduction and

recycling

Energy consumption

Noise and Land

Pollution

Air quality

Water consumption

Transport emissions

processing and

manufacturing

emissions

Purchasing from

sustainable resources

Biodiversity

67. Does your organisation’s corporate social responsibility (CSR) include measurement of your

organisation’s performance with respect to:

68. How important are sustainable or green initiatives to your organisation when considering supply

chain vendors and/or purchasing decisions?

Extremely important

Somewhat important

Not very important

Not at all important

69. What are the most important aspects of a sustainable supply chain for your organisation?

Low environmental impact

Ethics

Health and safety at work

Strong financial management

27

70. Who are the drivers for your organisation to be sustainable?

Consumers

Regulators and other authorities

Corporate leaders or policy

Non-governmental organisations


71. How do you raise awareness for your organisation’s supply chain sustainability?

Externally recognised sustainability certificate or label

Published information about the supply chain

Advertising through marketing activities


72. Has your organisation’s supply chain become more sustainable when compared to last year?

Significantly higher

Higher

Stayed the same

Lower

Significantly lower

28

Organisations are often posed with the challenge to decide when to consider sourcing their

materials and products from international or domestic markets. Both markets have pros and

cons, as domestic sourcing allows for better quality control and shorter time to market, but

sourcing locally can often be more expensive. On the other hand, international sourcing allows

for reduced costs with cheaper materials and labour, but the cost of shipping, logistics

infrastructure as well as governmental norms play a crucial role in decision making. Despite

pros and cons to both, the lines become blurred when to choose one over the other.

Procurement


73. How does your organisation source the good and services?

International markets

Domestic markets

74. Does your organisation outsource the procurement services?

Yes

No

75. How does the outsourcing procurement organisation source the goods and services?

International markets

Domestic markets

Not applicable

76. What are the key reasons for your firm to outsource procurement to international markets?

Low cost skilled labour

Cheap raw materials

Low trade tariffs and taxes

Not applicable

29

77. What are the key reasons for your firm to outsource procurement to domestic markets?

Reputation and brand image

Less stress on supply chain

Fast delivery times

Reduce environment waste

Reduced cost of logistics

Reduce communication issues (time zone, language

barriers, etc.)

Not applicable

30

Thank you for taking the time to complete this survey. We look forward to sharing the results

with you!

Report Subscription


78. I would like a free copy of the report emailed to me*

Yes

No

First Name

Last Name

Title

Company

Email Address

Phone Number

79. To receive your free copy of the report, please provide your contact information here:

This survey is sponsored by

31

Terms & Conditions

1. The State of Supply Chain Management 2019 is an ASCI Report and belongs to ASCI Research.

2. ASCI and its sponsor reserve the right to the report findings.

3. Report findings will be kept strictly confidential and stored at the ASCI National Office.

4. Report respondents reserve the right to privacy if stated "No" in Question 78.

5. ASCI will store contact information in order to deliver the report to respondents, its members and relevant stakeholders, where

applicable.

6. Respondent contact information will be kept strictly private and confidential.

32

Enter your results into the online survey and submit before 28 August 2019 to go into the draw to win one of five conference passes to ASCI2019, valued at over $2,000 each. T&Cs apply.Keep this hard copy of your results so that, when the report becomes available, you can benchmark your organisation’s supply chain management performance against 300 plus other organisations from a wide variety of industries! To access the online survey, hover your phone camera over the QR code.

the state of supply chain management 2019 introduction · the state of supply chain management 2019...

Documents