Survey Reveals 32% of Manufacturers Still Rely on Fax to Communicate Production Status in Outsourced Supply Networks
June 30, 2016
Concerns for third-party access to visibility include security, complexity and cost, but the costs of workarounds and inefficiencies are even greater
Marlton, NJ – June 30, 2016 – Even as outsourcing increases, manufacturers are still largely disconnected when it comes to working with external supply partners – putting profitability, compliance and customer retention at risk.
Acsis, a leading provider of supply chain visibility solutions, surveyed 110 supply chain executives through Supply Chain Digest to uncover the priorities, expectations and challenges of achieving real-time visibility into goods as they move through third-party production cycles. View the results analysis here.
Outsourcing grows – along with information dissatisfaction
So-called “hub” manufacturers – those who own the production of goods for customers – are increasingly relying on third-party suppliers to support the “make-to-ship” process. These supply chain partners execute everything from co-manufacturing, specialty production and finishing, to packaging and logistics.
Forty-two percent of survey respondents report they are increasing their level of outsourcing and 26 percent report that they have already largely outsourced activities to outside suppliers. Yet, most are dissatisfied with quality of the information they receive from the partners in their supply chain networks, citing concerns about accuracy, timeliness and detail.
Perhaps that’s because their communication methods are 20 years behind. Eighty percent rely on email as their means of information reporting with supply chain partners – largely through spreadsheets – and 32 percent still use faxes.
Limited supply chain visibility translates to lack of control and increased risk
Manufacturers are compensating with a variety of inefficient and risky workarounds, ranging from padding customer delivery dates (41 percent), to holding excess inventory (35 percent), to redundant manual data entry (64 percent of respondents). The consequences include paying expediting costs as a result of “crisis mode,” (67 percent of respondents) and jeopardizing customer retention and satisfaction with stockouts (64 percent of respondents).
Optimistic about benefits – if they could overcome the barriers
Supply chain managers want to fix the problem; 81 percent believe that improved supply chain visibility and collaboration would result in significant benefits, such as cost savings, efficiency improvements, increased accuracy and shorter lead times. However, they have been hesitant to break down the business and technical barriers to partner visibility, citing cost, security risks and technical complexity as the key reasons why. Thirty-two percent have never tried to integrate partners into their IT systems.
“Despite decades of investment and improvement in enterprise integration, visibility remains blurry outside the four walls of the enterprise. As outsourcing to supply chain partners continues to grow, manufacturers need lightweight data tools, like Acsis Edge Network, to capture real-time status, update enterprise and related systems, and trace goods as they move through the make-to-ship process.”
– Jeremy Coote, CEO of Acsis, Inc.
Coote is a veteran of the ERP arena, having served as President of SAP North America in the 90s, when its enterprise software became the “system of record” for thousands of large, global manufacturers everywhere.
Acsis Edge Network is a lightweight, cost-effective solution that solves the problems of visibility of product movement and synchronization of systems across extended supply partners. With Acsis Edge Network, partners exchange data using technology they already have – from a web portal to automated data capture systems – eliminating the need for special training and allowing partner systems to communicate directly with the ERP system.
The survey results, as well as DuPont’s supplier integration success story, are detailed in a free, on-demand Supply Chain Digest webinar, available here.
Note to editors:
Statistics are from a survey of 110 supply chain executives in chemical, food & beverage, consumer products, pharmaceutical and other manufacturers, conducted in May and June 2016 by Supply Chain Digest on behalf of Acsis, Inc.
For over 20 years, Acsis has specialized in lightweight, cost-effective solutions that fill visibility gaps in supply chain execution. Our “edge” applications manage the data collection and serialization of goods across extended supply networks, feeding and synchronizing ERP and execution systems automatically. Customers are able to gain significant savings in material costs, reduce their inventory levels and waste, improve resource productivity and process efficiency, and eliminate noncompliance risks (and fines).
Acsis is headquartered in Marlton, NJ. Customers include AmerisourceBergen, Ashland, Cintas, DuPont, Glatfelter, Hershey’s, Meda and OSRAM. www.acsisinc.com
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Acsis and Acsis Edge are trademarks or registered trademarks of Acsis Inc. Other company names, product names and company logos mentioned herein are the trademarks, or registered trademarks of their respective owners.