Freight still matters

Here’s a non-shocker from the survey world: how manufacturers develop, produce and then deliver products to their customers around the world—in essence, how well their supply chains function—is a hinge point upon which firms will live or die.

You don’t say?

Pardon me for seeming cynical here, but it continues to amaze me just how often the supply chain—and by extension the freight transport connections within it—continue to be taken for granted.

Trucks by themselves deliver close to 70% of the freight in this country outside of their role in first-mile/last-mile connections to railheads, airport tarmacs, ports, consumers at their homes, and the like.

But driving a truck still remains an often low-paid endeavor, and drivers themselves still get treated like third-class citizens, often by warehouse and freight dock personnel who should know better.

Such workers in the manufacturing world should especially know better because their senior executives continue to busily strategize on ways to make supply chains more efficient and reliable, the very logistics networks that ultimately—surprise, surprise!—rely on those very same truck drivers who end up being treated so shabbily at the dock.

Enough ranting on my part. Let’s dig into some of the findings from the 2015 Global Manufacturing Outlook survey conducted by consulting firm KPMG International.

Some 386 senior manufacturing executives from around the world participated in the KPMG poll, which found that over the next year, 44% of survey participants plan to allocate more than 20% of their total technology spend on systems to improve the pace and value of innovation, especially in engineering, manufacturing and, here it is, their supply chains.

According to the KPMG survey, U.S. respondents are even more bullish on such investment strategies, with 62% of them planning to allocate more than 20% of their technology spend on those areas.

“The focus on new product development, collaborative innovation, and speed to market all require new strategies and business models. If manufacturers hope to grow by driving new innovations to market, they need to focus on improving the agility and integration of their supply chain models,” stressed Jeff Dobbs, global head of industrial manufacturing at KPMG.

Yet just 8% of U.S. respondents in the poll said they currently have complete visibility into their supply chain. In fact, U.S. respondents are almost twice as likely to say their supplier data is not reliable enough and their technology is not sophisticated enough for greater integration.

“Innovation waits for no one. Those who fail to embrace the new reality of the accelerating innovation cycle will quickly be left behind,” Dobbs pointed out. “Investing more in research and development is certainly helpful, but manufacturers also need to focus on continuously enhancing and adapting their innovation models if they hope to survive.”

Guess truck drivers and their role in supply chain efficiency matter a lot more than many might think.

Sean Kilcarr is Fleet Owner’ s executive editor. He can be reached at skilcarr@fleetowner.com