Businesses unhappy with supply chain systems

Supply chain IT criticised as too costly to run and maintain

Businesses are struggling with overly complex and financially inefficient supply chain systems, according to research published this week.

Some 26 per cent of the 400 firms in Europe and the US questioned for the survey say resources spent on dealing with different supplier transaction mechanisms are a significant cost to the business, while 50 per cent say their facilities are too costly to run and maintain.

Extended supply chains that rely on disparate technologies and standards are hindering efficient trading with suppliers and customers, says Clive Longbottom, senior director at analyst Quocirca, which conducted the research for IT vendor GXS.

‘If a business spends a large amount of money and resources managing a complex supply chain, it is not spending enough on the business itself,’ he said.

Some 80 per cent of respondents say they use electronic or web-based IT systems to manage more than 1,000 suppliers, but 21 per cent do not know how many active suppliers their supply chain systems contain.

Martin White, retail specialist for consultant Langsdale Crook and former Sainsbury’s supply chain director, says firms often turn to IT systems to manage supplier relationships, but can find them cumbersome.

‘IT, operations and accounts all have a supply chain interest, but no single person owns the business interface,’ he said.

Peter Walker, senior systems development manager at distribution firm Nisa-Today, says electronic systems can be a problem for smaller firms.

‘Larger companies insist on traditional electronic data interchange. But the cost can be prohibitive to smaller companies, which find web-based and simple XML-type messaging more accessible,’ he said.