When it comes to managing a business, one of the most critical components is the supply chain. A well-designed and executed supply chain can make all the difference in terms of efficiency, cost, and customer satisfaction. However, working with the wrong supply chain agency can have devastating consequences, as statistics reveal. In this blog, we will explore the statistics that highlight the risks involved and provide examples to illustrate the fear of working with the wrong supply chain agency.
The Statistics
- 1. Supply Chain Disruptions Can Be Costly: Supply chain disruptions can result in a 3-5% loss in revenue, which can be a significant blow to a business.
- 2. Lack of Visibility Impacts Agility and Decision Making: 65% of procurement leaders have limited or no visibility beyond their tier-1 suppliers, making it difficult to respond quickly to disruptions.
- 3. Poor Data Quality Costs Millions: Poor supplier data quality can cost millions due to poor business decisions, ineffective operations, and logistics.
- 4. Manual Processes Slow Time to Market: Manual processes can slow down the onboarding of new suppliers, resulting in lost business opportunities and tangible opportunity costs.
- 5. Missing Governance Standards and Lack of Transparency Increases Risk: 93% of CPOs rate risk reduction as a top priority for their organization, highlighting the importance of transparency and governance in supply chain management.
- 6. Sustainable Sourcing and Traceability are Key for Consumer Trust and Loyalty: 31% of CFOs indicated supply chain issues rank as one of their top three concerns related to the COVID-19 outbreak, emphasizing the need for sustainable sourcing and traceability.
Examples of the Devastating Impact
- 1. Late Deliveries: Late deliveries can lead to negative reviews and ratings, damaging a retailer’s reputation and causing lost customers. For instance, 32% of customers cited late deliveries as an issue when online shopping, and 46% cited expensive delivery costs as a problem.
- 2. Supply Chain Disruptions: In 2022, more than 80% of organizations experienced at least one significant supply chain disruption, and 50% experienced three or more. Material shortages were the top challenge, affecting 60.9% of participants.
- 3. Poor Customer Service: Poor customer service can lead to a loss of customer loyalty and ultimately, revenue. For example, if a company fails to provide accurate deliveries, it can lead to a loss of trust and a negative reputation.
