A solid supply chain can decrease purchasing and production costs for both sellers and manufacturers.
This is why companies are always looking for ways to improve theirsupply chain management.
With research showing that 79% of companies with high-performing supply chains achieve revenue growth greater than the average within their industries, it is evident that the supply chain is a strategic tool for both manufacturers and retailers to take advantage of.
From customer shipping to inventory management, each stage of the supply chain is a critical factor that plays into the overall management of a company’s logistics.
To visualize the variety of ways that companies are making their supply chains more productive we have compiled the most significant supply chain statistics for you to analyze.
It’s becoming increasingly difficult for businesses to meet customer demands when it comes to shipping. Amazon’s approach to ecommerce shipping and logistics has changed the game so drastically that supply chain managers are labeling their impact as the “Amazon effect.” The Amazon effect is essentially the assumption that all e-commerce sites must provide customers what they want, when they want it and at a lower price.
There is no doubt that this is most apparent when it comes to customer shipping. According to Forbes Insights, 44% of respondents state that the Amazon effect is having a dramatic impact on their logistics, supply chain and transportation operations. To stay competitive in the shipping world, businesses must utilize shipping software which can help streamline outgoing shipments to customers.
Furthermore, companies can analyze these statistics on how to improve their shipping strategies:
87% of today’s customers are willing to wait two or more days to receive free shipping. (Aberdeen)
Amazon reported that shipping costs increased to $21.7 billion in 2017, an increase from just $11.5 billion in 2015. (MarketWatch)
30% of supply chain leaders highlighted the need to respond to customer mandates for faster, more accurate and unique fulfillment as a top business priority moving forward. (SupplyChain247)
By the end of 2020, 50% of all manufacturing supply chains will have the capability, either in-house or outsourced, to enable direct-to-consumption shipments and home delivery. (IDC)
Transportation management statistics
Transportation management is the daily tracking of transportation operations which often includes fleet management, fuel costing, route planning, customer communications, supplier relations and cargo handling. Transportation managers often use transportation management software (TMS) to help control and reduce costs of company transportation. Here are some stats that prove the benefits of incorporating a TMS into your supply chain:
Transportation management systems can improve freight savings by up to 8%. (Forbes)
By using a TMS solution, a shipper can reduce freight invoice payments by 90-95% (Cerasis)
Most users experience about 5 to 10% freight cost reductions after implementing TMS, with the higher end of the scale increasing by at least two%age points. (Logistics Management)
Just 35% of shippers are using these systems as part of their overall supply chain management strategies. (Logistics Management)
Recently there has been a 15% growth in TMS usage within the small to mid-sized businesses market, with some vendors reporting more than 20% growth for that market. (Logistics Management)
Global TMS market size was $1.8 billion in 2018, and it is expected to reach $4.8 billion by the end of 2025. (Marketwatch)
Inventory management statistics
As more and more customers are turning to online sites for their shopping, businesses must improve their inventory and warehouse management in order to speed up customer purchases. Warehouse management software and inventory control software aid businesses in the day-to-day management of inventory shipping, storing and sorting solutions.
These statistics below show that implementing an inventory management system can improve the speed of your order shipments and increase the efficiency of business operations:
When operations upgrade their pick/inventory systems from paper-and-pencil to a more integrated form of order processing, they enjoy on average a 25% gain in overall productivity, a 10–20% gain in space use, and 15–30% more efficient use of stock. (Easypost)
Pick-to-Light systems can improve pick rate productivity by 30–50%. (MHI)
From 2016 to 2017, 25% more retailers and manufacturers were investing in better warehouse management. (Statista)
46% of SMBs either don’t track inventory or use a manual method. (Wasp barcode)
48% of supply chain and transportation executives say they are experiencing the need to reevaluate warehouse locations due to shifting trade patterns resulting from changes in the U.S. economy. (Forbes Insights)
36% identify the opportunity to optimize their inventory to balance supply and demand as a top driver for their analytics initiative. (SupplyChain247)
30% of supply chain managers highlighted the need to respond to customer mandates for faster, more accurate and unique fulfillment as a top business priority moving forward. (AP News)
The supply chain is the process of moving a product from the supplier to the customer. This process generally involves a secondary business that must act as the sales channel between supplier and customer. Businesses that have a productive supply chain are able to cut operating costs and improve the efficiency of their transportation, inventory management and overall logistics. Companies can utilize a variety of software such as supply chain planning software, supply chain visibility and supply chain analytics technology software to aid in the process of establishing and analyzing supply chain management.
Businesses with optimal supply chains have 15% lower supply chain costs, less than 50% of the inventory holdings, and cash-to-cash cycles at least three times faster than those not focused on supply chain optimization. (Logistics Bureau)
Nearly two-thirds (63%) of companies do not use any technology to monitor their supply chain performance. (Zurich Insider)
Only 22% of companies take an active approach to supply chain network design. (Logistics Bureau)
21% of supply chain professionals say that visibility is their biggest organizational challenge. (Statista)
More than 70% of chief supply chain officers believe by 2020, the supply chain will be a key driver of better customer service for their organizations. (Accenture)
81% of supply chain professionals say analytics will be important in reducing landed costs. (The Hackett Group)
By 2019, 75% of large manufacturers will update their operations using IoT implementations and analytics to accelerate the time to market and mitigate risk. (IDC)
Supply chain projections
Activities associated with transportation and logistics account for 10–12% of global GDP. (Forbes Insights)
The United States ranks 10th in on-the-ground trade logistics performance. (Statista)
65% of logistics, supply chain and transportation executives say that there are tectonic shifts in logistics, supply chain and transportation processes. (Forbes Insights)
50% of respondents say advancements in technologies are exerting a strong impact on their company’s logistics, supply chain and transportation operations. (Forbes Insights)
By 2020, 65% of e-commerce operations will make use of autonomous mobile robots within their order fulfillment processes, thus helping increase productivity by over 100%. (MHLnews)
By 2024, over 60% of G2000 manufacturing organizations will rely on artificial intelligence platforms to drive digital transformation across the supply chain, leading to productivity gains of over 20%. (Inbound Logistics)
What does this mean for supply chain managers?
The supply chain is at the core of your company’s logistical health. With this in mind, it’s important to understand the varying ways that companies modify their supply chain management to adapt to customer demands.
Businesses that make improvements to their inventory management, transportation and shipping reap the benefits of a competitive advantage by having a more efficient and streamlined supply chain.
Mike is a market research analyst focusing on CAD, PLM, and supply chain software. Since joining G2 in October 2018, Mike has grounded his work in the industrial and architectural design space by gaining market knowledge in building information modeling, computer-aided engineering and manufacturing, and product and machine design. Mike leverages his knowledge of the CAD market to accurately represent the space for buyers, build out new software categories on G2, and provide consumers with data-driven content and research. Mike is a Chicago native. In his spare time he enjoys going to improv shows, watching sports, and reading Wikipedia pages on virtually any subject.