Study shows increasing gap between industry leaders and the rest
London - September 11, 2001 – A growing technological investment gap is leaving many European logistics service providers in danger of being unable to deliver “eFulfillment services”, despite increasing customer demand, according to a new survey released today by Accenture.
The eFulfillment survey shows that whilst some European companies are actively leading the industry by investing in the Internet and providing eFulfillment capabilities now, the majority - 60 percent - are adopting a “wait and see” approach. Therefore many organizations may not be ready when customers step up their demands for improved and more integrated eFulfillment services.
Jon Bumstead, Partner responsible for Integrated Fulfilment in Accenture’s UK and Ireland Supply Chain Management practice, said:
“Whilst 72 percent of companies see web technologies as central to their future, only a quarter see the majority of their business transactions being online in two years. What is clear is that there are currently two lanes in the logistics industry – the fast lane, occupied by a small number of big ambitious players, and the slow lane, where everyone else is. The current trends suggest that unless smaller companies start investing soon, they may be looking at a gap that is too great to bridge.”
The survey shows that future use of the Internet in supporting companies’ logistics and supply chain services varies across Europe. Spain is leading the way with 63 percent of respondents seeing web-based technologies as core to future growth and development, followed by the Nordic countries with 46 percent in agreement. In both the UK and Italy 38 percent of respondents share this view, as do 33 percent of Benelux respondents. German and French providers are more sceptical with only 18 percent and 14 percent respectively in agreement.
There is consensus however, that the top uses of the Internet will provide “tracking and tracing”, order capture and returns management services.
Most logistics service providers remain unconvinced of the benefits of the Internet. Just over half of respondents see it as a vehicle for cutting costs and only 43 percent feel it could be used to attract customers. As many as 40 percent of providers claim they have not yet assessed the new technologies nor developed a strategy for investment.
Most companies perceive too many barriers to investment, such as:
- Lack of suitable products - 43 percent
Level of capital investment required – 53 percent Lack of confidence that investment will bring sufficient ROI – 53 percent No current demand from customers – 50 percent Lack of compatible systems to interact with solutions – 52 percent
Despite the inevitable barriers, a number of leading providers do see rewards for developing eFulfillment capabilities. Once again Spain leads the pack with 42 percent of respondents believing that web-based technology will allow them to secure more work in the future. In the UK 29 percent share this belief compared with 27 percent in both Germany and Benelux, 25 percent in Italy, 23 percent in the Nordic countries but only seven percent in France.
Jon Bumstead, commented:
“ Whilst healthy scepticism for web technologies is only to be expected, especially given the current technology climate, the survey is still sobering reading for the industry. Logistics companies have a choice - either to invest in new technologies and build distinctive eFulfillment capabilities to win customers and take leadership positions, or to “wait and see” and watch their current asset based services gradually commoditise. Now is a good time to take a closer look at the new wave of products on the market and get your eFulfillment strategy in place.”
E-Fulfilment is a supply chain wide capability to completely satisfy customer needs, in either the B2B or the B2C channel, with emerging web-based technologies in the most cost efficient manner possible.
About the Survey
Accenture researched over 100 senior decision makers in logistics service provider companies in seven countries across Europe. The research focused on attitudes towards new technologies, the role eFulfillment currently plays in the industry and the perceived importance of, and opportunities presented by, the Internet in the future. This survey is the first in a series of three pan-European surveys from Accenture’s Supply Chain Management Practice.
Accenture is the world’s leading provider of management and technology consulting services and solutions, with more than 75,000 people in 46 countries delivering a wide range of specialized capabilities and solutions to clients across all industries. Accenture operates globally with one common brand and business model designed to enable the company to serve its clients on a consistent basis around the world. Under its strategy, Accenture is building a network of businesses to meet the full range of any organization’s needs – consulting, technology, outsourcing, alliances and venture capital. The company generated revenues before reimbursements of $9.75 billion for the fiscal year ended August 31, 2000, and $8.67 billion for the nine months ended May 31, 2001. Its home page is http://www.accenture.com.