Exploring Attitudes Towards Digital Supply Chain Transformation in Large Business and SMEs

1.1

Key findings

• SMEs are less likely to prioritise adopting digital supply chain technologies than large businesses. Policy makers and technology suppliers should be targeting these businesses with messaging on the benefits and importance of digitising supply chains, as well as sharing best practices, in order to increase uptake.

• Above all, businesses are looking to enhance efficiency and automation by digitising their supply chains. When bidding for new projects, technology suppliers should ensure that proposals clearly demonstrate how digital supply chain solutions can achieve this objective. 

• Insufficient skilled professionals is one of the most common barriers to digital transformation when it comes to supply chains. Companies can overcome this by outsourcing projects to technology providers that will also help to fill any skills gaps their organisation may be experiencing.

• Large businesses may not be dedicating sufficient budget to achieving their digital transformation objectives. Supply chain teams and technology suppliers would benefit from focusing on proving the business case for digital supply chain technology including driving value.

• System integrators, software vendors and technology consultancies are all in a good position to educate businesses about digital supply chain solutions as they are viewed by companies as the experts. These companies should be proactively engaging with businesses of all sizes to demonstrate the benefits of digital supply chain technology to increase uptake. 

• SMEs are currently less likely to be developing digital supply chain technologies in house and therefore may be more open to outsourcing. Technology providers can help these businesses to plug any skills gaps they may be experiencing and should take care not to overlook smaller businesses when planning their marketing strategies.

• Both large businesses and SMEs are eager to adopt AI. When putting together proposals for digital transformation projects, technology suppliers should therefore be sure to demonstrate the business case for integrating AI into digital supply chains solutions, as well as showing how it can drive value.

1.2

Business priorities

• SMEs are less likely to be prioritising digital supply chain transformation

According to the findings, adopting digital supply chain technologies is high on the agenda for many large organisations. In fact, seven in ten (70%/351) respondents from large businesses say this is a priority¹ for their organisation, while just 8% (40) of respondents in large businesses say it is not a priority² for their organisation. Adopting new digital supply chain technologies (33%/165) is a top priority for large businesses along with improving market reputation (34%/170) and reducing costs (34%/170).

Figure in %. Data from large manufacturers

Respondents in SMEs are less likely to state that digitising their supply chain is a priority for their organisation. Three in five (60%/301) say that this is the case, while almost a fifth (19%/95)² say this is lower down their company’s to do list. The findings also show that adopting new digital supply chain technologies (17%/85) is less likely to be cited as a top business priority for SMEs than reducing costs (45%/226), increasing brand awareness (38%/191), improving market reputation (26%/131) and enhancing customer satisfaction (26%/131).

Data from SME manufacturers

1.3

Supply chain transformation priorities

• Enhancing supply chain efficiency and automation tops the list of supply chain priorities

The findings reveal that almost all large businesses surveyed have one or more top priorities when it comes to digitally transforming their supply chains. In fact, just 1% (5) say they don’t have any current supply chain top priorities.

Enhancing efficiency and automation (47%/236), building resilience against disruptions (44%/221), and developing a more sustainable supply chain (39%/196) are most likely to be cited by large businesses as top priorities. However, strengthening supplier collaboration (15%/75) is lower on the agenda when it comes to the use of digital technologies in relation to supply chains. 

On the other hand, SMEs surveyed are slightly less likely to be prioritising supply chain digital transformation, with 14% (71) saying they don’t currently have any supply chain top priorities. That said, over two in five (44%/221) of these businesses are looking to enhance supply chain efficiency and automation, while a third are prioritising building resilience against disruptions (33%/166), developing a more sustainable supply chain (33%/166) and improving visibility and traceability (33%/166).

Data from large manufacturers

The findings reveal some regional differences in attitudes. For example, respondents in SMEs surveyed in the South (48%/47) and the Midlands (46%/40) are most likely to say that enhancing efficiency and automation are their current supply chain top priorities when it comes to the use of digital technologies. However, respondents in the North are most likely to say that this is building resilience against disruptions (40%/32).

1.4

Barriers to digital transformation

• Digital transformation plans are hindered by insufficient resources

The findings show that businesses of all sizes are facing similar challenges when it comes to adopting digital supply chain technologies. In fact, respondents in both large businesses and SMEs are most likely to say that the most significant barriers hindering digital transformation in their organisation are existing processes (Large – 32%/161, SMEs – 26%/131), resources (Large – 31%/156, SMEs – 28%/141) and work culture (Large – 29%/146, SMEs – 27%/136). 

However, there are some differences between the barriers faced by large businesses and SMEs. For example, respondents from large businesses are more likely than those in SMEs to say their talent pool (27%/131 vs 19%/95) is holding them back. However, respondents in SMEs are more likely to be struggling due to a tech-averse workforce. Almost one in five (18%/90) of these respondents say their workforce is afraid of new technology, while just one in nine (11%/55) of those in large businesses say the same. Furthermore, over a fifth (22%/110) of respondents in SMEs say concerns around the threat of AI are a significant barrier to digitally transforming their supply chain, while just one in seven (14%/70) of those in large businesses say the same.