A increased focus on customer experience is the top factor driving innovation and adoption of new technologies in transportation and logistics, according to a new report from supply chain software provider BluJay Solutions and research firm Adelante SCM.
The report, which drew on the results of a survey of 140 executives from the manufacturing, retail and logistics service provider sectors, among others, found that market leaders in the transportation and logistics space are placing an even greater emphasis on customer experience in designing their supply chains, while lower-performing providers remain acutely focused on competing on cost.
Thirty-seven percent of respondents that identified as “above-average performers” and 36 percent of “innovators/early adopters” ranked delivering an enhanced customer experience as the top factor driving innovation at their companies, compared with just 24 percent at “average or below-average performers” and 20 percent at “laggards/late majority” firms.
Conversely, 46 percent of laggards and 36 percent of average and below-average companies ranked reducing costs and price-based competition as the top factor in innovation, compared with 28 percent of innovators and 26 percent of above average performers.
Looking at the data from an industry-specific perspective, the survey also indicates that logistics service providers are far more focused on customer experience as a differentiator, whereas shippers are more focused on controlling costs, according to BluJay.
The report also found that innovators and early adopters also are more likely to have already adopted integrated supply chain management solutions, whereas laggards are more likely to still be focused on updating or replacing antiquated or overly manual systems. For example, 77 percent of innovators said they currently use a transportation management system and 56 percent said they still use Excel spreadsheets for freight planning and execution, while 78 percent of laggards reported using Excel and 61 percent said they currently employ TMS software.
This division also was evident in the respective challenges firms reported facing with regard to technological adoption and innovation. While innovators ranked lack of flexibility or innovation on the part of their supply chain partners as the biggest barrier to innovation, late adopters ranked outdated existing IT systems as the toughest hurdle to clear.
“These findings suggest that in order to drive faster and more efficient supply chain innovation, leaders need to find flexible, future-proof solutions (i.e. cloud infrastructure, open architecture) to continue to innovate, while laggards must leapfrog ahead by replacing their outdated IT systems with modern ones that eliminate the silos that still exist between their systems and processes,” said BluJay.
Looking to the future of supply chain, the report found that across all survey respondents, the top investment priorities were transportation, supply chain visibility, warehousing, BI/analytics and trading partner connectivity — and not nascent technologies like blockchain and autonomous vehicles.
“Despite all the hype surrounding blockchain, drones and driverless trucks, those technologies ranked near the bottom of the list in terms of which technologies will deliver the most innovative benefits to the supply chain in the next five years,” said BluJay. “Instead, companies believe technologies such as mobile devices and apps, control tower visibility and warehouse automation/robots will lead the way.
“In general, the top three technologies are all further along the maturity curve and have more established records of delivering benefits than the technologies lower on the list. The findings suggest that perhaps there’s still a level of skepticism or wait-and-see attitude among supply chain executives when it comes to some emerging technologies.”
According to Doug Surrett, chief product strategist at BluJay Solutions, one of the key takeaways from the report is that it is becoming increasingly important for service providers to take a holistic approach in designing modern supply chains.
“The most important lesson learned from companies that have been disrupted is the danger of becoming too complacent with the status quo,” said Surrett. “As we move into the next evolution of supply chain logistics, it’s not just about getting goods from point A to point B at the lowest cost, it’s about innovating with a clear objective to optimize the overall customer experience. This requires an approach that considers the entire supply chain ecosystem.”