Hot Topic Report
Biggest Supply Chain Challenges of 2014
Supply Chain Consortium
Benchmarking & Best Practices
August 2014
www.supplychainconsortium.com
Table of Contents
Introduction
3
Survey Demographics
4
Supply Chain Challenges Categories
6
Biggest Short-Term Challenges
7
Biggest Long-Term Challenges
16
Conclusions
17
Report Authors
18
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2
Introduction
This report explores the most significant short-term and long-term supply chain
challenges facing today’s executives. Survey demographics are presented first to
provide a foundation for the reporting of results.
The report breaks down the categories of challenges, as well as a ranking of
short-term challenges with specific comments by survey respondents. It is
interesting to note that the topics identified in the first question about categories do
not necessarily line up with the comments by respondents. We received different
responses to the question of challenge categories when inquiring about a specific
category.
The report concludes with an analysis of the long-term supply chain challenges
and how they differ from short-term challenges. While the topics are generally
similar, the ranked order and specific comments are very different.
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3
Survey Demographics
Percentage
Percentage of Survey Participants by Segment
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
18.9%
16.2%
13.5%
10.8%
8.1%
8.1%
8.1%
5.4%
2.7%
2.7%
2.7%
2.7%
The largest industry segments of the survey were consumer products,
transportation services/3PL, food and beverage, and technology/electronics.
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Survey Demographics
Percentage of Survey Participants by Company Size
50.00%
45.00%
40.00%
Percentage
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Greater than $25 Between $10 billion Between $1 billion
billion annual
and $25 billion
and $10 billion
revenue
annual revenue
annual revenue
Between $250
million and $1
billion annual
revenue
Less than $250
million
Companies with revenues between $1 billion and $10 billion made up more than
40% of respondents, which is typical in surveys of this type. This is followed by
smaller companies with less than $250 million in revenues.
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5
Supply Chain Challenges Categories
Percentage of Responses for Challenges Categories
Forecasting
Demand planning
Inventory management
Supplier management
Network planning
Supply chain technology
Vendor collaboration
Transportation capacity
E-fulfillment
Strategic sourcing
Distribution operations
Transportation planning
Product development
Manufacturing planning and scheduling
Customer service
Distribution facilities
3PL operations
Manufacturing operations
Manufacturing quality
Supply chain talent and resources
Sustainability
Transportation modes
Unpredictable demand
Brand protection
Life cycle management
0.0%
62.2%
45.9%
40.5%
37.8%
32.4%
29.7%
27.0%
21.6%
21.6%
21.6%
18.9%
16.2%
16.2%
16.2%
10.8%
10.8%
8.1%
8.1%
8.1%
5.4%
5.4%
5.4%
2.7%
2.7%
2.7%
10.0%
20.0%
30.0%
40.0%
Percentage
50.0%
60.0%
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70.0%
6
Biggest Short-Term Challenges
The topic areas with the most responses, and therefore considered to represent
the greatest short-term challenges for supply chain leaders, are listed below in
rank order.










Transportation
Suppliers
Inventory
Resources/Talent
Forecasting
Technology
Distribution Centers
E-Commerce
Demand Planning
Network Design
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Biggest Short-Term Challenges
Transportation
Specific Comments
Transportation Cost and Capacity (5)
Driver Shortage (3)
Transportation Mode Changes (2)
Driver Training and Retention (2)
Transportation Management (2)
Carrier Cost Increases
Reductions in Transit Times
Truckload Capacity and Cost
Increasing Small Parcel Business
*Numbers in parentheses = Number of occurrences for that specific response
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Biggest Short-Term Challenges
Suppliers
Specific Comments
Supplier Management (2)
Supplier Quality Issues (2)
Upgrading Suppliers (2)
Vendor Collaboration (2)
Supplier Evaluations
Education
Supplier Forecast Accuracy
Securing Supply for New Technology
Low Volume Supplier Shipments
*Numbers in parentheses = Number of occurrences for that specific response
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9
Biggest Short-Term Challenges
Inventory
Specific Comments
Inventory Management (6)
Optimizing Inventory Flow (2)
Inventory Control
Increasing Inventory Turns
End-of-Life Inventories
*Numbers in parentheses = Number of occurrences for that specific response
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10
Biggest Short-Term Challenges
Resources/Talent
Specific Comments
People Development and Training (3)
Hiring Professionals (2)
Hiring and Training Hourly Staff (2)
Adequate Resources to Achieve Expected Results
Leadership Pipeline
Filling Leadership Openings
Individual Workloads
*Numbers in parentheses = Number of occurrences for that specific response
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11
Biggest Short-Term Challenges
Forecasting
Specific Comments
Forecast Accuracy (3)
Getting Good and Timely Forecasts (3)
Poor Forecast Inputs
Communication of Forecasts
*Numbers in parentheses = Number of occurrences for that specific response
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12
Biggest Short-Term Challenges
Technology
Specific Comments
Technology Implementations (3)
SAP Implementation
WMS Replacement Project
Identify and Implement Systems
Advance Planning Systems
*Numbers in parentheses = Number of occurrences for that specific response
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13
Biggest Short-Term Challenges
Distribution Centers
Specific Comments
Space Planning and Constraints (2)
Capacity Expansion
Perfect Order
Cost and Productivity Improvement
Consolidation
24/7 Operations
*Numbers in parentheses = Number of occurrences for that specific response
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14
Biggest Short-Term Challenges
E-Commerce
Specific Comments
E-Commerce Fulfillment (4)
Optimizing Profitability and Service
Same-Day Delivery
Changing Retail Environment
*Numbers in parentheses = Number of occurrences for that specific response
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15
Biggest Long-Term Challenges
The topic areas with the most responses, and therefore considered to have the
greatest long-term challenges for supply chain leaders, are listed below in ranked
order.











Resources/Talent: Attract and retain talent, people development
Suppliers: Supplier collaboration, supplier management
Technology: Technology implementation, investment in technology
Distribution Centers: Space planning and capacity, cost reductions
Transportation: Driver retention and shortages, DOT hours
Inventory: Inventory management, optimize flow
Forecasting: Forecasting and accuracy, visibility
Demand Planning: Demand planning and S&OP
Overall Supply Chain: Capacity, end-to-end integration
Network Design: Optimization, supply chain network planning
Growth: Sales growth, emerging market growth
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16
Conclusions
There is considerable overlap between the topic areas that were determined to be
short-term challenges and those that were long-term challenges, but the ranked
orders are very different.
Short-Term Challenges
Long-Term Challenges
Transportation
Resources/Talent
Suppliers
Suppliers
Inventory
Technology
Resources/Talent
Distribution Centers
Forecasting
Transportation
Technology
Inventory
Distribution Centers
Forecasting
E-Commerce
Demand Planning
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17
Report Authors
To learn more about benchmarking and best practices, additional resources are available to members
through the Supply Chain Consortium: www.supplychainconsortium.com
Bruce Tompkins
Executive Director
6870 Perry Creek Road
Raleigh, NC 27616
(919) 855-5527 Office
(919) 345-0479 Mobile
btompkins@tompkinsinc.com
SUPPLY CHAIN EXCELLENCE
SUPPLY CHAIN EXCELLENCE
Qualified companies can join the Supply Chain Consortium’s LinkedIn or Xing Group:
www.supplychainconsortium.com/rc/connections.asp
Chris Ferrell
Director
6435 Hazeltine National Drive
Suite 105
Orlando, FL 32822
(407) 362-0369 Office
(919) 624-3947 Mobile
cferrell@tompkinsinc.com
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18