Germany Ahead of UK in Digitised Supply Chain, Says Survey

A new survey analyses the maturity levels of large UK and German companies in their efforts to digitise their supply chain ecosystems – with a focus on sustainability and transparency drivers. The survey among 150 supply chain decision makers* reveals a major difference between Germany and the UK. One quarter of German companies claim to have a fully digitised supply chain compared to only 5 per cent of UK companies. All respondents are optimistic about the quick pace of digitising their supply chain; 20 per cent of UK respondents (27 per cent in UK) are confident to have a fully digitised supply chain within the next 1-2 years.

The study, on behalf of Infosys Consulting, shows that businesses recognise the importance of embracing Industry 4.0 principles and clearly see the benefits. 72 per cent of UK respondents (70 per cent in Germany) are convinced that digitisation of the supply chain has become more important over the past five years; 77 per cent of UK companies – and 17 per cent of German companies – rank digitisation as the most important aspect for the next five years. A great majority of respondents (79 per cent in GER, 80 per cent in UK) see a positive impact on profitability in their company due to a digitised supply chain.

“This survey offers valuable insights into the views on the current role and future impact of Industry 4.0 on the supply chain”, says Jonquil Hackenberg, an Advisory Practice partner with Infosys Consulting. “Overall, companies clearly understand the need for a fully digitised supply chain and the resulting benefits. However, a significant number of decision makers still neglects key success factors. For example, the survey reveals low rankings for the importance of ethical principles along the supply chain. Infosys Consulting’s mission is to support companies on their journey to an end-to-end digitalised ecosystem that offers sustainability, traceability, predictability and agility.”

Key findings of the survey:

Sustainability in supply chains
• UK companies put more emphasis on ethical principles along the supply chain. While 44 per cent of German respondents do not see ethical aspects within the supply chain as having increased in importance over the past five years, only 30 per cent of UK respondents share this opinion. Almost half of German respondents do not see ethical aspects of growing importance over the next five years (28 per cent in UK). This view is underlined by the answers to the question concerning the three least important aspects of the supply chain. 41 per cent of German respondents cite ethics within the supply chain, compared to 27 per cent in the UK.

• Within the group that saw an increasing importance of ethical aspects, 85 per cent of UK companies identified the drive for ethical sourcing as the main reason (88 per cent of German companies). The number one reason for UK respondents is new legislation with 88 per cent.

• Asked for the three most important factors in their supply chains, most UK respondents cited speed of operation (39 per cent), followed by digitsation (35 per cent); and traceability (32 per cent). Cost reduction (21 per cent) is of lower importance for UK companies. In contrast, German respondents cited speed of operation (39 per cent), followed by cost reduction of process (37 per cent); digitization and collaboration across the supply chain had 28 per cent each.
• Almost a quarter of respondents in both Germany and the UK see transparency among the three least important supply chain aspects.
Benefits of digitisation
• Regarding a positive impact of the supply chain digitisation on various business aspects, German respondents’ top mentions are profitability and transparency with 79 per cent each, followed by ability to track the supply chain process and being able to communicate product origins with 76 per cent each.
• For UK companies, the strongest positive impact is on providing clear data trails across the supply chain (89 per cent), followed by the ability to respond to changing demands (88 per cent) and dealing with inefficiencies in production (87 per cent).

Challenges on the way to a digital supply chain
• Asked for the three main challenges in digitising their supply chain, the most cited aspects by German respondents are integration of software with 24 per cent (20 per cent in UK), ensuring data security with 24 per cent (20 per cent in UK) and cost for purchasing technology with 23 per cent (27 per cent in UK).
• For UK companies, training of existing staff is a big challenge; this aspect is cited by 32 per cent of respondents as opposed to 17 per cent in Germany.
Operational supply chain goals and barriers to achieving them
• For UK companies, instant information availability is number one of the top three operational goals (37 per cent), supply chain transparency comes in number two with 36 per cent. Among German respondents transparency is of lesser importance (25 per cent).
• German companies see automated processes (36 per cent) and instant information availability for all parties (32 per cent) as the two top operational goals for their digital supply chain.
• Asked for the largest barriers to achieving their operational goals, UK companies identify rising energy costs as their top hurdle (28 per cent), followed by data security concerns and lack of collaboration with 25 per cent each.
• German companies rank lack of knowledge as the biggest hurdle (28 per cent), followed by lack of supplier/partner collaboration (26 per cent) and data security concerns (25 per cent).

Plans for supply chain investment
• In both Germany and the UK, artificial intelligence is high on the companies’ agenda to be incorporated into the supply chain in the next five years; 39 per cent of German respondents cite AI as a future investment (44 per cent in UK).
• Next on the agenda for German companies is the integration of mobile tracking (38 per cent), followed by real-time data, GPS data and skills training with 34 per cent each.
• For the UK companies, incorporating data sharing capabilities is slightly more important than AI (45 per cent, 28 per cent in Germany).

*Methodology
Infosys commissioned independent research agency Northstar Research Partners with a targeted regional survey among supply chain decision makers in Germany and the UK. The total sample consisted of 150 respondents (75 people per country). The research consisted of a 15-minute online survey of supply chain decision makers in companies larger than 5,000 employees. The survey was conducted during November and December 2017.

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