For the past 10 years, Gartner has conducted a study of supply chain management technology users' wants and needs. For that study, we ask end users to comment on their priorities, challenges, and investment strategies related to those technologies. The 473 respondents who completed the 2017 survey were qualified according to industry as well as their personal involvement in decisions regarding supply chain management processes, strategy, and supporting technology. A key component of the study is to evaluate how various factors like information technology (IT) investments influence supply chain maturity.
A notable takeaway from this year's study is that better allocating supply chain IT investments appears to be a key contributor to improving supply chain maturity. This matters because Gartner's research has consistently found a strong correlation between a company's supply chain maturity and its overall business performance. Nearly 90 percent of organizations at the highest (Stages 4 and 5) supply chain maturity levels are above-average performers or leaders in their industry while, regrettably, over 40 percent of companies at the lowest (Stage 1) supply chain maturity level are below average.
Article Figures
[Figure 1] SCM IT budget allocation by supply chain maturityEnlarge this image
Measuring maturity and IT spending
The relationship between supply chain maturity and investments in supply chain IT was revealed by examining respondents' answers in the context of both Gartner's supply chain maturity model and the "Run, Grow, Transform" framework Gartner uses to categorize IT spending.
The supply chain maturity model defines five stages for supply chain capability: React, Anticipate, Integrate, Collaborate, and Orchestrate. To reach the highest level of maturity, companies must sequentially progress through each stage:
Stage 1 (React) supply chains are revenue-focused and have a "firefighting" operational culture and a fragmented approach to product supply and delivery. Supporting technology is lacking and/or fragmented, and individual business units rely on a mix of legacy systems, third-party software, and spreadsheets to support supply chain functions.
Stage 2 (Anticipate) supply chains begin building more cohesive organizations with greater emphasis on standardizing processes and reducing costs. They focus supply chain IT investments on specific operating functions, although these remain disconnected due to the lack of an integrated supply chain strategy.
Stage 3 (Integrate) supply chains seek to efficiently deliver outcomes across the value chain by crafting a holistic design of supply chain processes that span functional boundaries. The supply chain organization's expanded scope of control includes planning and execution functions as well as, at minimum, a center of excellence to support strategy, design, and performance improvement.
Stage 4 (Collaborate) supply chains strive to better align with and deliver customer-defined value through a market-based orientation and "outside-in" supply chain design. Companies develop cost-to-serve insights and begin working with selected customers and strategic suppliers to develop and optimize multienterprise business processes.
Stage 5 (Orchestrate) maturity is likely relevant for only those few companies that have the market-leadership position, vision, and capability to go beyond one-to-one collaborative relationships. Success requires cultural values and governance that balance operational excellence with innovation and multienterprise value creation through partner ecosystem orchestration.
In the "Run, Grow, Transform" framework, run-the-business IT initiatives address essential, generally undifferentiated business processes. These typically focus on operational processes, maintaining the status quo, reducing costs, and improving accuracy or control. In supply chain IT this can include things like infrastructure costs, application maintenance, and basic support services. Grow-the-business initiatives aim to improve operations and performance within current business models. They often are measured in financial terms, such as revenue and earnings, or in operational terms, such as cycle times, customer retention, or quality. A key aspect of a grow-the-business discussion is that the value comes from directly affecting existing business processes. In supply chain IT this can include things like implementing new or upgrading existing applications.
Transform-the-business initiatives blaze new trails, supporting, for example, new markets, new products, new processes, and new business models. Transformational change affects entire ecosystems, including a company's employees, partners, markets, and customers, and can in some cases fundamentally alter the trajectory of markets. In supply chain IT, transform-the-business initiatives are strategically inspired, and thus usually are driven from the top down. It is often hard to identify and quantify specific value from transform-the-business initiatives due to business unknowns.
Transform-the-business investments improve maturity
Gartner's study found that Stage 1 maturity companies allocate 67 percent of their supply chain IT budgets to basic, run-the business services, 25 percent to grow-the-business initiatives, and less than 10 percent to transformational investments. In contrast, the highest-state maturity organizations (Stages 4 and 5) are far more balanced; only 40 percent of their budgets are aimed at run-the-business services, while 26 percent is allocated to transformational investments—over three times the 8 percent allocated to transformational initiatives by Stage 1 maturity companies. (See Figure 1.)
As the above descriptions of the five maturity stages suggest, supply chain technology is integral to companies' ability to "anticipate, integrate, collaborate, and orchestrate" their internal and external supply chains. That is supported by the study's findings, which indicate that for supply chain organizations to reach higher stages of maturity they must focus more attention on how they apportion their IT investments.
Any effort to develop a strategy for IT investments with an eye toward advancing supply chain maturity must begin with laying a solid foundation by building a cohesive system of record that becomes the transactional backbone for the enterprise. To achieve Stage 2 maturity, supply chain organizations then need to consolidate transactional systems of record while also investing in stand-alone point solutions for functional standardization and scalability. Stage 3 maturity requires organizations to use design modeling and analysis to evaluate supply lead times, cost to deliver, and inventory positioning in support of resilience, efficiency, and agility. They must also target investments to develop platforms that help them synchronize processes across individual functional domains regardless of reporting relationships and span of control.
Finally, to reach Stage 4 and Stage 5 maturity, organizations must accelerate the convergence of planning and execution to enhance visibility, collaboration, and agility across a networked supply chain by emphasizing technology investments that enable multienterprise process orchestration within and across partner ecosystems. In particular, Stage 5 organizations achieve competitive advantage by making technology investments that are built upon a stable system-of-record foundation, enhanced with high-value-added systems that enable differentiation and innovation.
As previously noted, a major benefit of achieving higher levels of supply chain maturity is that it directly correlates with stronger corporate performance. That's reason enough to invest in technology that will support and enable advances in maturity. But there's an additional benefit to be had: Gartner's research finds that for companies to improve their overall business performance they must reallocate supply chain IT investments, with a strong emphasis on earmarking more capital for growth-oriented and transformational IT initiatives.
The venture-backed fleet telematics technology provider Platform Science will acquire a suite of “global transportation telematics business units” from supply chain technology provider Trimble Inc., the firms said Sunday.
Trimble's other core transportation business units — Enterprise, Maps, Vusion and Transporeon — are not included in the proposed transaction and will remain part of Trimble's Transportation & Logistics segment, with a continued focus on priority growth areas following completion of the proposed transaction.
Terms of the deal were not disclosed but as part of this agreement, Colorado-based Trimble will become a shareholder in Platform Science's expanded business. Specifically, Trimble will have a 32.5% stake in the newly expanded global Platform Science business and will receive a Platform Science board seat. The company joins C.R. England, Cummins, Daimler Truck, PACCAR, Prologis, RyderVentures, and Schneider as a key strategic investor in Platform Science along with financial investors 8VC, Activant Capital, BDT & MSD Partners, Softbank, and NewRoad Capital Partners.
According to San Diego-based Platform Science, the proposed transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.
From Trimble customers’ point of view, they will continue to enjoy the benefits of their Trimble solutions, with the added flexibility of the Virtual Vehicle platform from Platform Science. That means Virtual Vehicle-enabled fleets will receive access to the Virtual Vehicle Marketplace, offering hundreds of new and expanded applications, software, and solution providers focused on innovating and improving drivers' quality of life and fleet performance.
Meanwhile, Platform Science customers will enjoy the added choice of Trimble's remaining portfolio of transportation solutions which will be available on the Virtual Vehicle platform, the partners said.
"We believe combining our global transportation telematics portfolio with Platform Science's will further advance fleet mobility and provide our customers with a broader portfolio of solutions to solve industry problems," Rob Painter, president and CEO of Trimble, said in a release. "Increased collaboration between the new Platform Science business and Trimble's remaining transportation businesses will enhance our ability to provide positive outcomes for our global customers of commercial mapping, transportation management, freight procurement, and visibility solutions. This deal will result in significant synergies along with tremendous opportunities for employees to continue to grow in a more-competitive business."
The acquisition comes just five months after Platform Science raised $125 million in growth capital from some of the biggest names in freight trucking, saying the money would help accelerate innovation in the commercial transportation sector.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
Economic activity in the logistics industry expanded in August, though growth slowed slightly from July, according to the most recent Logistics Manager’s Index report (LMI), released this week.
The August LMI registered 56.4, down from July’s reading of 56.6 but consistent with readings over the past four months. The August reading represents nine straight months of growth across the logistics industry.
The LMI is a monthly gauge of economic activity across warehousing, transportation, and logistics markets. An LMI above 50 indicates expansion, and a reading below 50 indicates contraction.
Inventory levels saw a marked change in August, increasing more than six points compared to July and breaking a three-month streak of contraction. The LMI researchers said this suggests that after running inventories down, companies are now building them back up in anticipation of fourth-quarter demand. It also represents a return to more typical growth patterns following the accelerated demand for logistics services during the Covid-19 pandemic and the lows of the recent freight recession.
“This suggests a return to traditional patterns of seasonality that we have not seen since pre-COVID,” the researchers wrote in the monthly LMI report, published Tuesday, adding that the buildup is somewhat tempered by increases in warehousing capacity and transportation capacity.
The LMI report is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
That hiring surge marks a significant jump in relation to the company’s nearly 17,000 current employees across North America, adding 21% more workers.
That increase is necessary because U.S. holiday sales in 2023 increased 3.9% year-over-year as consumer spending grew even amidst uncertain economic times and trends like inflation and consumer price sensitivity. Looking at the coming peak, a similar pattern is projected for this year, with shoppers forecasted to drive a 4.8% increase in holiday retail sales for 2024, Geodis said, citing data from Emarketer.
To attract the extra workforce, Geodis says it will offer competitive wages, peak premium pay incentives, peak and referral bonuses, an expedited payment option, and flexible schedules. And it’s using an AI-powered chatbot named Sophie to serve as a virtual recruiting assistant.
“We acknowledge the immense responsibility we have to our customers to deliver exceptional service every day, and this is especially true during peak season,” Anthony Jordan, GEODIS in Americas Executive Vice President and Chief Operating Officer, said in a release. “Because peak season is the most business-critical sales period of the year for many of our retail clients, expanding our workforce is vital to ensure we have a flexible, dynamic team that can handle anticipated surges in demand.”