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3 Ways Antiquated Supply Chains Fail

by Simon Eskow
A couple of years ago, manufacturers confessed to running antiquated supply chains. Apparently, these B2Bs operate in the digital age using relatively crude methods. For example, they conduct trade with their partners by fax. Despite knowing the technology exists to modernize supply chain management, they simply hadn’t adapted it yet.

Antiquated Supply Chains Bog Down Business

Old habits die hard, as a 2016 survey of North American companies illustrated. While 94% of these B2Bs identified supply chain visibility platforms as a key “enabler,” they lagged in implementation. Moreover, 48% of them still conducted trade with their partners by phone, fax or email. However, most of them saw the need to transform their antiquated supply chains. And there are plenty of great reasons to do this. Here are just three reasons antiquated supply chains stink.

1. They Blind You to Facts

As the survey above suggests, antiquated supply chains involve segregated and inefficient processes. For example, a business might manage stock in spreadsheets, orders by phone, etc. Obviously, these processes don’t integrate well, making data difficult to extract. Lack of data, in turn, translates into zero supply chain visibility. This, in turn, makes it difficult for businesses to maintain stock levels, manage orders and keep inventory costs down. Complete real-time supply chain visibility improves cash conversion, forecasts, and customer satisfaction.

2. They Bury You in Administration

Relatedly, segregated systems pile on the paperwork and administration requirements. If you use separate systems to track orders, process fulfillment and manage stock levels, you’re simply creating more administration work. And the more channels you sell through, the more administration bogs you down. Once again, the key to reducing administrative costs is integration of every aspect of your supply chain.

3. They Hamstring Your Competitiveness

Product-focused businesses make supply chains more efficient to improve profitability. In a recent example, fast-fashion brand H&M is redesigning its own after a disappointing 2017. Efficient supply chains reduce costs and increase profit margins. The faster a business gets products out of their inventory, the lower the cost. However, antiquated supply chains don’t provide the visibility, data or efficiency to accomplish that. Only integration, visibility and automation can get you there.