Readers familiar with Mercator Advisory Group will know that we are typically focused on payments-related topics, so this particular article, posted in Global Banking & Finance Review, is somewhat tangential, but then again, not really. Even though this referred piece is about retailers and the management of physical supply chains (vendor partners, logistics, etc.), the gathering of goods to sell (wherever that might be) involves orders, payments and in many cases, financing arrangements.
So, for example, if we are writing about the consequences of corporate banks failing to digitalize their systems as we plow ahead into 4IR and IoT, that is essentially the same subject applied to a separate business case. So the article refers to some survey data released by Gravity Supply Chain Solutions, a Hong Kong based startup that specializes in supply chain solutions for trading partners.
‘According to new research released from Gravity Supply Chain Solutions, 85 percent of U.S. retailers havent completed the digitization processes (using a cloud based platform with real time visibility, and automation capabilities) required to give them full control of their supply chain. Without this, retailers will struggle with speed to market, hampering their ability to efficiently allocate supply with demand with the knock-on impact of reducing sales…..The research which is based on interviews with 500 retail executives in the U.S. and the U.K. reveals that only 15 percent of U.S. retail businesses have completed supply chain digitization. Despite this slow rate of digitization, the report finds that 60 percent of respondents see digitization as critical to creating seamless omnichannel retail experiences.’
So what is meant mean by ‘completed supply chain digitization’? We expect this means moving away from spreadsheet management of suppliers and procurement choices into a digital experience. This transition opens doors to various benefits around cost, controls, and effectiveness. In a recent report titled B2B Marketplaces: Disruption Presents Opportunity, we point out that there is a distinct demographic shift also underway, whereby millennials have a preference for digital solutions, and that is not going to diminish, only grow. So it seems that the survey retail environment needs to get a move on.
‘For those who have fully digitized their supply chains, one significant benefit has been better decision-making with 76 percent stating that they believe their organization has enough data and insight to make the right decisions about its supply chain. More than 55 percent say that order tracking across all touchpoints has improved the customer experience while 53 percent say personalization of products has increased.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group