Research shows manufacturers still struggling to effectively

integrate and analyse supply chain data; AI usage expected to double in

the next five years to capitalise on the digital opportunity

BRACKNELL, England & SCOTTSDALE, Ariz.--(BUSINESS WIRE)--The majority of European manufacturers are only at the early

stages of their digital supply chain journey, according to a new report

from JDA

Software, Inc., and WMG, at the University of Warwick. The ‘Delivering

the Digital Dividend’ report benchmarked the digital supply chain

readiness of 179 European manufacturers, revealing that only 13 per cent

currently have a ‘prescriptive’ supply chain (categorised as Level 3,

out of a scale of 1-4, with 4 being a self-learning autonomous supply

chain). However, the report does reveal that manufacturers are keen to

digitally transform their supply chains, with almost one third (31 per

cent) predicting they will have a prescriptive supply chain in place by


Manufacturers missing the mark when it comes to data

The report reveals that most manufacturers are yet to fully harness the

potential of digital to compete through greater customer intimacy.

Although manufacturers are moving towards greater supply chain

segmentation and differentiation, the biggest primary strategic focus is

on operational excellence (39 per cent), rather than product leadership

(31 per cent) and customer intimacy (30 per cent). Data remains a key

ingredient towards delivering both operational excellence and greater

customer intimacy, but manufacturers are struggling to integrate and

synthesise it effectively. The evidence suggests that manufacturers are

only just beginning to embark on data collection from new sources.

Artificial intelligence (AI) is predicted to be the fastest-growing


Considering the data challenges facing manufacturers, it doesn’t come as

a surprise that they are looking at new ways to come to terms with, and

capitalise on, the exponential growth in data. AI adoption is predicted

to grow three times faster than other areas of investment, such as

sensor networks, Internet of Things (IoT) and robotics. Until now,

however, only just over a quarter (28 per cent) have started to use AI.

S&OP struggles, but segmentation and network design are early

responses to digital complexity

The report suggests that when it comes to Sales & Operations Planning

(S&OP), manufacturers have underlying problems to address. S&OP was

rated as having the lowest level of maturity (34 per cent) of the 11 key

supply chain processes manufacturers were asked about. Only 21 per cent

of manufacturers have the ambition to use S&OP to support end-to-end

business optimisation by 2023, and 22 per cent said the same for supply

chain optimisation. This indicates that manufacturers should continue to

focus on evolving from S&OP to Integrated Business Planning (IBP), as

strong processes will underpin digital agility.

Digital optimization means transitioning from a ‘node’ to a ‘network’

approach’, periodic to real-time decision frequency, and supply chains

evolving from ‘one-size-fits-all’ to a market segment of one.

The research reveals how manufacturers are responding:

  • A key enabler of supply chain segmentation, Allocation Planning and
    Order Promising, was identified by manufacturers as the process with
    the highest ambition to adopt digital technology, doubling over the
    next five years from 30 percent to 61 percent. Doing this will help
    manufacturers progress on their journey to a segment of one.

  • One fifth (20 per cent) of manufacturers believe that by 2023 their
    factory planning and scheduling will be able to respond in real-time.

  • Almost two thirds (61 per cent) of manufacturers will have end-to-end
    network design by 2023, reflecting the fact that fulfillment
    complexity has risen rapidly in the digital era. However, in a digital
    world network design cannot be resolved in isolation: an end-to-end
    approach is required.

“To maintain and enhance competitive advantage, organisations need to

focus on three aspects of the supply chain digital transformation

process,” said Professor Jan Godsell, Professor of Operations and

Supply Chain Strategy, WMG, University of Warwick. “First they must

use digital technologies such as AI and Machine Learning to support core

supply chain processes. Next, they should pave the way for end-to-end

supply chain optimisation by adding a business process layer to their

organisational structure. This will put them in a position to leverage

functional excellence while also breaking down siloed areas. Finally,

they should lay the groundwork for end-to-end business optimisation,

using digital technology to break through the IBP impasse.”

“In practice, manufacturers can enable this to happen by creating ‘safe

places’ to experiment with new digital technologies. They may even wish

to consider the creation of a separate business entity for more radical

experimentation with new digitally enabled business models.”

“This report lays bare a fundamental truth: many manufacturers are not

as far along the journey to a digital supply chain as they should be. As

a result, they are yet to fully harness the potential of digital to

deliver greater customer intimacy,” said Hans-Georg Kaltenbrunner,

vice president manufacturing industry strategy, EMEA at JDA. “However,

if manufacturers put themselves in a position to better exploit their

data, they will be able to evolve supply chains from ‘one-size-fits-all’

to a market segment size of one. Now is the time to begin experimenting

with technologies such as AI and Machine Learning. The key is to make

sure they can successfully ride the digital wave, finding the right

balance between process excellence and digital readiness.”

Access the


To conduct the survey, the supply chain was

broken down into 11 core processes, from which a mission-specific

maturity grid was developed for each. Participants were asked to

identify their current maturity levels and their ambitions for five

years’ time, and from those parameters an overall aggregate score was

calculated. This methodology enabled patterns in digital maturity to be

identified in correlation with ambition and strategic gap analysis

Tweet this: New


WMG is a world leading research and education group and an academic

department of the University of Warwick, established by Professor Lord

Kumar Bhattacharyya in 1980 in order to reinvigorate UK manufacturing

through the application of cutting edge research and effective knowledge


WMG has pioneered an international model for working with industry,

commerce and public sectors and holds a unique position between academia

and industry. The Group’s strength is to provide companies with the

opportunity to gain a competitive edge by understanding a company’s

strategy and working in partnership with them to create, through

multidisciplinary research, ground-breaking products, processes and


Every year WMG provides education and training to schoolchildren through

to senior executives. There is a growing part-time undergraduate

programme for apprentices, as well as full-time undergraduates. The

postgraduate programmes have over 2,000 students, in the UK and through

centres in China, Singapore, Thailand, Malaysia and Cyprus.

For more information visit

WMG Social Media Networks:


About JDA Software, Inc.

JDA Software is the leading supply chain software provider powering

today’s digital transformations. We help companies optimize delivery to

customers by enabling them to predict and shape demand, fulfill faster

and more intelligently, and improve customer experiences and loyalty.

More than 4,000 global customers use our unmatched end-to-end software

and SaaS solutions to unify and shorten their supply chains, increase

speed of execution, and profitably deliver to their customers. Our

world-class client roster includes 75 of the top 100 retailers, 77 of

the top 100 consumer goods companies, and 8 of the top 10 global 3PLs.

Running JDA, you can plan to deliver.

JDA Social Networks:







“JDA” is a trademark or registered trademark of JDA Software Group, Inc.

Any trade, product or service name referenced in this document using the

name “JDA” is a trademark and/or property of JDA Software Group, Inc.


JDA Public Relations Contact:

Jolene Peixoto, Senior

Director, Corporate Communications

Tel: +1 978-475-0524,