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Overcoming the Misalignment Driving Friction Between Supply Chain Partners

Today’s Supply Chain Faces Tremendous Pressures
Between increasing customer expectations, accelerating demands on suppliers and retailers, decreasing lead times, surging fuel cost and the spiraling costs of labor and raw materials, the economy is uncertain and consumer demands are rising rapidly.

Overcoming the Misalignment Driving Friction Between Supply Chain Partners

Today’s Supply Chain Faces Tremendous Pressures

Between increasing customer expectations, accelerating demands on suppliers and retailers, decreasing lead times, surging fuel cost and the spiraling costs of labor and raw materials, the economy is uncertain and consumer demands are rising rapidly.

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Some of Our Findings Surprised Us

Some of what we learned confirmed what we already knew: that supply chain pressures have changed the shape of how trading partners do business. But we uncovered a startling trend: manufacturers and distributors are surprisingly misaligned in some key areas.

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But are Trading Partners Collaborating Effectively?

Are companies working together to reduce siloes, friction and misalignment? Enable decided to find out.

And These Pressures are Impacting Relationship

In order to work more effectively together, repair trust and form stronger, longer-lasting relationships, trading partners need to overcome challenges impacting their trading relations – which means they must work more closely together.

Supply Chain Pressures Have Polarized Relationships

Two-thirds of manufacturers say that their relationships have remained stagnant or grown weaker. Approximately 2 in 5 distributors and buying groups report stronger relationships. Only 25.0% of retailers believe their relationships have grown stronger.

Statistics

What is your opinion of your SPAs from a commercial perspective?

Relationships that/have :
100%
80%
60%
40%
20%
0%
All
If we could trade without them, we would
In many cases, they are fundamental strategy
SPAs are sometimes helpful
We avoid using SPAs where possible
All
Are stronger
Are weaker
Not changed
distributor
Manufacturer
Retailer
Statistics

How pressures on the supply chain have changed relationships with trading partners

Relationships that/have :
100%
80%
60%
40%
20%
0%
All
Relationships are stronger
Relationships are weaker
Relationships have not changed
All
Are stronger
Are weaker
Not changed
Buying Groups
distributor
Manufacturer
Retailer
Statistics

How pressures on the supply chain have changed relationships with trading partners

Relationships that/have :
100%
80%
60%
40%
20%
0%
All
Relationships are stronger
Relationships are weaker
Relationships have not changed
All
Are stronger
Are weaker
Not changed
Buying Groups
distributor
Manufacturer
Retailer

Most Organizations Aren’t Managing Their Relationships with Legally Binding Agreements or Contracts

• Only 8% of buying groups and distributors manage all their relationships with legally binding agreements.

• Nearly half of all manufacturers manage 50% or fewer of their relationships via contracts.

Distributors and Manufacturers Face Significant Misalignment

Only 9.8% of distributors report strong alignment between themselves and trading partners. Approximately half of all distributors report a lack of alignment about 50% of the time, meanwhile 75.58% of manufacturers report alignment between them and their trading partners. 40.4% of manufacturers say they review goals monthly but only 23.0% of distributors report the same.

Statistics

Frequency of friction due to misaligned objectives

100%
80%
60%
40%
20%
0%
All
Buying Groups
Distributors
Manufacturers
Retailers
All
Buying Groups
Distributors
Manufacturers
Retailers
Always
Frequently
Infrequently
Neither frequently
nor infrequently
Never
Very
frequently
Very in
frequently
Always
Frequently
Infrequently
Neither frequently
nor infrequently
Never
Very in
frequently
Statistics

Frequency of friction due to misaligned objectives

100%
80%
60%
40%
20%
0%
All
Buying Groups
Distributors
Manufacturers
Retailers
All
Buying Groups
Distributors
Manufacturers
Retailers
Always
Frequently
Infrequently
Neither frequently
nor infrequently
Never
Very
frequently
Very in
frequently
Always
Frequently
Infrequently
Neither frequently
nor infrequently
Never
Very in
frequently
Statistics

How would you rate the efficiency of your SPAs process?

100%
80%
60%
40%
20%
0%
All
Excellent
Very good
Good
Fair
Poor
All
Buying Groups
Distributors
Manufacturers
Retailers
EXCELLENT
VERY GOOD
GOOD
FAIR
POOR
Always
Frequently
Infrequently
Neither frequently
nor infrequently
Never
Very in
frequently

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Learn everything you need to know about misalignment impacting supply chain partners.
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