Deloitte Consulting has released a study claiming manufacturers can be up to 70 per cent more profitable by connecting with trading partners via the Internet.
The global study of 850 manufacturing executives in 35 countries, including 23 per cent of respondents from Australia, found only 13 per cent of those surveyed have integrated supply chain processes with effective CRM (customer relationship management).
Rod Gallagher, Deloitte's Australia New Zealand B2B head, said manufacturers typically focus on optimising how they deal with customers' orders only when they are received, primarily focusing on internal processes and interactions with suppliers.
"This results in an enormous amount of value being locked in the front end of the supply chain," he said.
Gallagher said "digital loyalty networks" integrate supply chain and CRM, maximising the lifetime value of a customer.
"Without strong, integrated links between suppliers and customers, manufacturers will face serious threats as globalisation and deregulation alter previously protected markets and networks of business; well-managed digital networks allow companies to differentiate between customers and prioritise them so that the capabilities of the supply chain are preferentially directed towards the most valuable customers," he said.
Deloitte Australia's eCustomer principal, Tony Lucas said over the past five years many companies have invested heavily in getting CRM, ERP (enterprise resource planning) and supply chain in order.
Lucas said this investment is yielding unprecedented enterprise-wide access to information about customers' requirements, profitability and cost-to-serve, while simultaneously increasing supply chain capability.
"However, the investment has focused on maximising the solution either for the customer experience or the supply chain with little regard to each other," he said.
"Today's manufacturing executives were typically raised in a product-centric era in which competitive advantage was achieved through product branding, quality and cost; the Internet era has dramatically shifted the power from manufacturers to the customer."
The study supports prioritising resources and orders, and abandoning the traditional one-size-fits-all supply chain that yields similar lead-time and service levels for all customers.