While it is an accepted supply chain business strategy that collaboration and sustainability can drive innovation and growth, most suppliers are not acting on this.

A new study from 3M shows that only 43% of suppliers feel fully empowered to collaborate with their partners.

In fact, half of all suppliers surveyed have held back from making strategic recommendations due to lack of incentive or customer openness. The reason for this is that 57% of suppliers don’t feel encouraged or empowered to innovate and make suggestions for improvement for the customers they supply.

Furthermore,  70% of suppliers said at least half of the customers they supply do not have a strong system and process in place for buyer and supplier collaboration.

“This coordination gap is potentially costing customers millions in efficiency and development opportunities,” the report concludes.

Technology

Change is in the air, however, as 60% of organizations are in the process of making major upgrades to their systems to become more connected to customers, according to the report.  Currently, 58% of organizations already have fully modern systems in place.  However, more work is needed since only 29% of organizations currently have a strong system in place for two-way demand planning.

While most suppliers agree the newly digitized system is beneficial to their partner relationships, one-fourth of respondents said organizations they supply make them use technology or systems that negatively impact productivity and collaboration.

Sustainability

Seventy-six percent of suppliers equate operating a sustainable operation to positive business outcomes. The next biggest drivers for sustainability and CSR: suppliers’ desire to create a more socially responsible supply chain (69%), compliance (64%) and brand reputation (62%).

Risks

3M’s research also uncovered some interesting data as it pertains to current risks throughout the supply chain. According to the research, sixty-one percent of respondents identified volatile commodity and supply prices as their primary concern.

Other top risks included:

  •        Uncertain policies of new U.S. administration (15%)
  •        Regulatory compliance (8%)
  •        The performance of tier two and tier three suppliers (7%)
  •        Natural disasters and supply disruptions (6%)
  •        Cybersecurity (3%)