Survey Says...

Two-thirds of manufacturing companies fail to synchronize supply chain operations

Paris and Mountain View, CA  August 8, 2002  Approximately two thirds of manufacturing companies do not successfully synchronize supply chain operations with their partners, ultimately leading both to added distribution and planning time and to increased costs according to ILOG, a supplier of enterprise-class software components and services, and APICS  The Performance Advantage, a publication for resource management professionals in the manufacturing sector.

The nine-question survey, recently conducted with ILOG's customers and APICS' 60,000 members and readers, was created to examine the extent to which manufacturing companies, using the supply chain management solutions available today, have been successful in sharing information, collaboratively scheduling production and delivery, and planning future projects as a team.

While nine out of 10 respondents said they believe supply chain planning tools could help address their synchronization issues, only one out of three respondents said their company was actually planning to look at supply chain synchronization issues in the next six months. ILOG and APICS said this affirms the findings made earlier this year by AMR Research. The research firm reported that although more than 90 percent of C-level executives from the leading Fortune 500 companies they surveyed claimed supply chain planning tools are a strategic necessity or very important to them, only 27 percent saw it as their responsibility to lead the collaboration effort.

The ILOG APICS survey also revealed that a majority of manufacturing companies fail to take advantage of supply chain management software to address synchronization despite the recognition that the technology is both readily available and provides valuable return on investment.

Other key findings of the survey include:
" More than eight out of 10 respondents believe it is very difficult to coordinate disparate software systems with those of their partners.
" More than two thirds of respondents find it difficult to coordinate their supply chain operations with those of their outsourcing partners.
" Two thirds of those respondents who do currently use supply chain management applications use different software solutions than their partners, creating a lack of access to valuable external data that leads to incomplete visibility into their supply chain.

"Despite all the exposure and publicity given to supply chain management applications, a large percentage of respondents still have not implemented these kinds of solutions," said Doug Kelly, editor of APICS. "The results of this survey indicate that many manufacturers have a ways to go in taking advantage of the tools that enable true supply chain synchronization."