IBM Study: Latin American Supply Chain Leaders See Disruption and Technology Infrastructure as Their Biggest Challenges for Years Ahead

The study also reveals that more than half of executives responded to supply chain disruptions by implementing new technologies such as automation.

A new study by the IBM Institute for Business Value (IBV), “Own Your Transformation”, notes that 56% of leaders in Latin America see supply chain and technology infrastructure disruption (46%) as the biggest challenges for their organizations in the next 2-3 years. Changes in the market (44%) and sustainability (34%) were also mentioned as key challenges.

46% of Latin American leaders responded to supply chain disruptions by introducing new technologies like automation, for example. The study shows that 55% of industry executives in the region are using predictive approaches in supply chain operations as a way to manage risks, and 51% of respondents confirm that they are applying open innovation.

“It is interesting to note how sustainability is climbing places among the key challenges in supply chain logistics, in line with other industries where we also notice this trend. Executives are redesigning their business processes to be more agile and efficient, while increasing their investments to improve their workflows with artificial intelligence, automation and hybrid cloud. And this transformation is coupled with a cultural change and greater collaboration with the entire ecosystem, which enables co-creation to improve the customer and consumer experience,” explains Salvador Álvarez Patuel, VP & Country Leader of IBM Consulting for Argentina and Uruguay.

The results demonstrate that companies are focusing extensively on the digital transformation of their supply chains. In addition, the Internet of Things (61%), artificial intelligence (AI), machine learning (55%) and hybrid cloud (45%) are the technologies selected by leaders that will help them the most in their business results in the next 3 years. The IBV survey included the participation of 1500 Supply Chain Managers (CSCOs) from around the world.

In Latin America, sustainability is a challenge and also a force for change. 39% of CSCOs place sustainability on their list of priorities and 34% see it as one of the biggest challenges for the next 3 years. 45% report that their sustainability investments will accelerate business growth and that they experience more direct pressure for sustainability transparency from customers (53%), investors (50%) and government (49%).

The main results of the study worldwide show that: 

“The Innovators”: 20% of respondents stand out for accelerating their data-driven innovation to prepare for a challenging future. Additionally, this group is already outperforming its peers on key metrics, including higher 11% annual revenue growth. Leaders are working on:

  • Integration of automated workflows across functions of the organization and with its partners to gain visibility, insights and real-time action (95% more than other CSCOs).
  • Modernizing their technology infrastructure: 56% currently operate in hybrid cloud and 60% are investing in digital infrastructure to expand and add value.
  • Expansion of its sustainability initiatives with the creation of new products and services. 58% see opportunities to improve their customers’ engagement on this topic.
  • Greater focus on cybersecurity (almost 20% more than other CSCOs).