Supply chain tech investors aren't seeing results
Staff -- Logistics Management, 7/1/2003
Over the past three years, an estimated $15 billion has been spent on new supply chain technology, but buyers have yet to see any substantial returns on those investments.
That's one of the key findings of a survey of supply chain executives at more than 100 companies, conducted by Capital Consulting & Management Inc. (CCMI) of Alexandria, Va. Fewer than 20 percent of respondents said they've seen a favorable return on investment (ROI) for systems they bought to reduce costs and inventories, shorten cycle times, and improve transportation, order management, and production performance.
Of the respondents who said they had seen a measurable return on their investments, 56 percent noted that it was lower than what they'd expected. About one-third said their ROIs were at expected levels, and 11 percent said returns had exceeded expectations. They cited organizational challenges, long implementation times, and a lack of technical support as the main reasons for that shortfall.
That doesn't mean that the systems themselves are lacking, says CCMI President Scott Elliff. "Companies need to turn their attention to improving usage of these new systems within the everyday execution of supply chain activities so that they get the bottom-line benefits these systems were designed to provide," he says.
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