Firms with better supply chain innovation report better financial results and have higher employee retention rates, according to a new study.
The survey, by logistics platform company, Descartes, found that amongst firms where supply chain innovation was deemed to be important by senior management, there was a 20% greater likelihood of having better financial performers, and these firms were also 13% more likely to experience lower employee turnover.
The report concluded: “Innovation importance, financial performance and employee turnover do, in fact, have significant impact on each other.”
It added: “A higher level of senior management importance placed on supply chain and logistics innovation goes ‘hand-in-hand’ with better financial performance and lower employee turnover.”
The study – which questioned 1,000 supply chain and logistics executives in North America and Europe – also found that companies in France were investing the most in supply chain and logistics innovation.
Here, two-thirds of French firms (67%) noted investment, followed closely by firms in the US (66%), compared to only 50% in Canada.
Innovative solutions implemented by firms include integrated real-time shipment tracking into their supply chain solution (49% of those questioned had done this); followed by integration with customer portals (36%), transportation management systems (27%), supply chain control towers (23%) and dock appointment scheduling systems (23%).
In Canada, France and the UK, the biggest driver behind innovation was the opportunity to lower costs.
In the US Germany and the Benelux region, meanwhile, improving reliability was the driver.
In Nordic countries, lower costs, improved reliability and better customer experience were all considered equal drivers in innovation.
The report said: “Management focus, better financial support and a more stable workforce are critical for accelerating supply chain and logistics innovation. Conversely, a lack of senior management support and financial wherewithal and higher employee turnover are significant inhibitors to fostering innovation.”
The research also found challenges following the Covid-19 pandemic and repeated supply chain shocks caused more companies (57%) to accelerate their innovation efforts.
An even greater amount (65%) planned to invest more in supply chain and logistics innovation initiatives in the next two years.
“The past two years have forced many companies to become more agile and rethink their supply chain and logistics strategies, tactics and technologies,” it said.
However, roadblocks to implementing innovation were widely reported by respondents.
Almost nine in 10 surveyed (87%) said they had faced obstacles, including attitude to risk and reward, lack organisational readiness, not having the right resources, and no clear payback.
Source : Supply Management