OMNICHANNEL & SUPPLY CHAIN MANAGEMENT

More proof about omnichannel and the new supply chain paradigm.  Too many firms are failing to realize the new business model and are struggling with traditional supply chain methods to meet this opportunity.

Survey: CEOs maintain traditional supply chain focus

June 23, 2014 | By Dan Berthiaume

Scottsdale, Ariz. – Although 50% of CEOs say that their supply chain can be a strategic differentiator in the new omni-channel customer paradigm, 83% of worldwide CEOs believe that their retail supply chains are currently “not optimal” for today’s changing retail environment. In a global retail CEO survey of more than 400 retail industry CEOs conducted by PwC for JDA Software titled: “CEO Viewpoint: The Strategic Role of Supply Chain in an All-Channel World,” CEOs indicated what they are doing to adapt to this changing environment and establish a new foundation for growth.

As mobile commerce comes of age, one of the biggest challenges facing CEOs is managing the transformation to omni-channel retail. However, only 34% of CEOs consider the rise of omni-channel shopping to be an external threat, while only 22% said it will have a direct impact on their organization.
CEOs think three fundamental risks will have the most impact on their organization during the next three years: increasing competitive threats (41%); margin erosion and cost reduction (39%); and attracting and retaining customers (24%). And 50% of CEOs recognize that their supply chain can be a strategic differentiator. The survey also revealed that CEOs who focus on optimizing their supply chains have 15% lower supply chain costs, less than half the inventory levels and more than three-times shorter cash-to-cash cycles.
Yet only 15% CEOs believe that their supply chain today is resilient enough to address the threat of external disruptions.
“The rise of omnichannel is one of the most transformational shifts that has occurred in retail in recent times,” said Baljit Dail, chairman of the board and interim CEO, JDA Software. “Retailers who don’t understand the strategic alignment of their supply chain with consumer expectations are in danger of becoming non-competitive. This isn’t about making a tweak to the operating model, it requires a massive change. The good news appears to be that there is an emerging group of visionary CEOs who understand that staying competitive during this inflection point requires a dramatic shift of their current operating models to deliver operational effectiveness and top- and bottom-line growth.”