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Overcoming the Misalignment Driving Friction Between Supply Chain Partners
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 Relationships
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.
What is your opinion of your SPAs from a commercial perspective?
How pressures on the supply chain have changed relationships with trading partners
How pressures on the supply chain have changed relationships with trading partners
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.
Frequency of friction due to misaligned objectives
Frequency of friction due to misaligned objectives
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Overcoming the Misalignment Driving Friction Between Supply Chain Partners
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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