There’s a new normal in supply chains

In response to the challenging supply chain environment, more than two thirds of make, move, sell companies shifted their business model in 2021, and 85% of them saw growth. That’s the top line from the 2022 Insights Report from Epicor.

The survey also showed that 78% of businesses surveyed changed their core business competencies over the last year to better compete. In addition, 85% agree that they achieved growth by diversifying their offerings. The primary strategies behind that growth include direct-to-consumer sales and delivery (47%), e-commerce (40%) and configure-price-quote (39%).

The survey was of 1,350 IT decision-makers in the U.S., U.K., Australia, and New Zealand in the manufacturing, distribution, building supply, automotive and retail industries The interviews were conducted in English from April 1 to 22, 2022. The margin of error is +/- 2.76%.

The commonly held belief is that industrial companies lag behind their B2C counterparts in digital capabilities, despite the common expectations of their customers. However, the latest findings from Epicor’s Annual Insights Survey firmly lay this misconception to bed, and demonstrate that businesses of all sizes are competing in new ways, and the good news is, it’s working.

The seismic shifts of the past two years have turned industries upside down, and businesses of all sizes are adopting innovative supply chains, moving into previously inaccessible markets, and competing in new ways. This wave of change is ushering in a newfound confidence and a priority of business growth. Of all survey respondents, 56% are prioritizing growth. This approach is even more optimistic among distributors (63%) and retailers (59%).

The pandemic has had a strong influence on recent large company evolution, and small-to-medium-size businesses rose to the challenge as well. A staggering three quarters (78%) of those surveyed across manufacturing, distribution, building supply, automotive and retail industries changed their core business models over the last year to better compete.

And 44% added new strategies. For instance, 47% added direct-to-consumer sales and delivery while 40% added online e-commerce ordering. Also, 39% added configure-price-quote solutions.

While disruption was a major part of companies’ focus last year, so was rationalization and streamlining of business initiatives. Thirty-four percent said they evaluated their approach and pulled back on certain strategies. As a result of all this change, 85% saw growth by diversifying their offerings.

Given the choice of in-person, remote, and e-commerce channels, purchasers want it all. Over half (56%) of distributors in the survey began offering direct-to-customer-sales, signifying the emergence of a new breed of hybrid businesses being dubbed distro-facturers.

Naturally, digital transformation has been cited as critical for diversifying services. Eighty-six percent changed their technologies to adjust for their expanded capabilities. Specifically, 85% chose to diversify their supply chain, and 84% diversified to ecommerce. As a result, the majority (54%) are confident their business is on the right path and almost all respondents (95%) believe the right-fit technology will accelerate growth.

The survey data underscores that businesses do not intend to stand still. Midsize companies looking to compete are consistently evaluating their business strategies, adjusting them to expand their offerings and leaning into highly flexible cloud-based technologies to drive agility and performance. While it may be tempting to act rapidly, careful planning, the right integration partner and a solid implementation strategy will carry the day.

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