Research Reveals Digital Integration Is The Biggest Challenge Facing British Firms

Over three quarters of UK companies cite digital integration as the main barrier to supply chain management (SCM) according to new research commissioned by BT and carried out by Warwick Business School between July and October 2000. The study explores the driving force behind supply chain strategies in British industry. Eighty-six companies were interviewed, spanning the entire business spectrum across the public and private sector.

The scale and complexity of achieving an integrated supply chain or a "glass pipeline" as one respondent described it is evidenced by the research, which finds little sign of any truly integrated supply chains.

• 64% of companies say customers and brand are the main drivers for e-business
• 80% cite digital integration as the main barrier to supply chain management
• Only 20% of SMEs have a written e-strategy
• 70% cited price pressures and cost reductions
• 52% point to the management of information flows
• Less than 40% see e-procurement as a critical strategic issue.

This is further evidence that British business is not maximising the potential of good SCM. Dr Simon Croom, supply chain expert at Warwick Business School's operations management group, says, "A major concern here is the apparent lack of clear strategic awareness of the implication and benefits of e-procurement. Procurement is viewed as an administrative process in the majority of organisations, the exception being organisations with over £1 billion turnover - for these organisations procurement is of major strategic importance."

Note to Editors: This research was commissioned by BT. It sets out to provide an independent analysis of supply chain strategy using an interview-based methodology focusing on senior level managers in functional roles including supply chain, logistics, procurement, finance, and information technology/information systems. For the purpose of this study, large organisations are described as those with a turnover of £50 million a year, and SMEs with a turnover of less than £50 million a year.

The research commenced in July 2000 and was conducted using a two-method research design. A survey instrument was tested and developed in July 2000 as a basis for a large telephone survey of supply chain activities and strategies in the UK. A total of 86 useable responses were completed by September 2000. A second, parallel stage of the study involved visits and multiple interviews with a cross-section of managers involved in supply chain management and e-business developments.