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Labor Shortage Hampering Digitalization Efforts

Labor Shortage Hampering Digitalization Efforts

May 13, 2022
A new CSCMP survey finds that 52% of companies say they lack skilled labor.

Everyone is on the bandwagon when it comes to digital transformation.  In the third annual study by the Council of Supply Chain Management Professionals and ToolsGroup, 93% of companies are actively engaged in digital transformation.

What's standing in the way of these efforts, according to 52% of survey respondents, is they lack either the people to do the jobs or the people who have the right skills for these jobs.

The companies are willing to address that as respondents’ top growth investment for 2022 was “increasing recruitment and training efforts."

Additionally, 51% of companies say they will increase automation in 2022 to focus staff on higher-value activities, due to labor shortages and the '"great resignation."

The survey, which took place from January to March 2022 and included 300 supply chain professionals around the world, reports that most companies started 2022 with a positive business outlook but are extremely concerned about external factors that have impacted supply chain planning strategies in the last two years.

Those external factors include:

  • Supply chain delays (25%)
  • Surging inflation (24%)
  • Escalating fulfillment costs (19%) 

In comparison, respondents were less concerned about internal issues such as shorter product life cycles, risk of obsolescence, or more production options.

Companies are also reacting to external factors. At 47% each, developing better and faster reactions to unplanned disruptions and increasing supply chain resilience are the other top objectives for 2022. Last year’s top objective–to keep up with evolving customer behaviors and expectations–has plummeted to number five in 2022.

But while external factors are pushing the digital transformation initiatives, it's the people factors that are perceived as the most critical success factors. Half of the respondents (50%) said a continued focus on people, process, technology and security implications is vital to delivering successful digital transformation results, followed by change management and effective communication (45%) and the need to develop leadership-driven goals (43%).

“The past two years have put a spotlight on the need for digitizing supply chain planning, and fortunately, more companies than ever are responding by stepping up efforts to transform their operations,” said Caroline Proctor, chief marketing officer, ToolsGroup, in a statement. “The percentage of companies that are not pursuing a digital transformation strategy at all is, at 7%, the lowest we have measured so far. Our findings reveal increasing investments in software, automation and people.”

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