The increasing complexity of global supply chains means manufacturers and retailers recognise the need to explore more advanced techniques such as segmented production strategies if they are to meet customer expectations.

A new report prepared for JDA Software Group by Talant explains that most manufacturers and retailers are still relying on outdated tools and ineffective processes to manage the complicated end-to-end value chain.

"It's no secret that retailers' and manufacturers' supply chains have become increasingly complicated - often spanning thousands of miles and dozens of trading partners," said Kevin Iaquinto, chief marketing officer at JDA.

"While executives acknowledge that complexity, they have been slow to adopt best practices and best-in-class technology solutions to manage their increasingly sophisticated challenges in key areas including production planning and scheduling, supply chain planning and execution, demand management and transportation.”

Iaquinto says that until they make improvements here, manufacturers and retailers will continue to struggle in optimising their end-to-end supply chains.

When asked about their priorities for optimising inventory management, the top two responses from 255 executives across 17 countries, were 'improving service levels' and 'moving inventory closer to demand'.

In this regard, around 59% of executives cited 'deploying automation' to manage inventory as a key initiative for the future.

Of those surveyed, more than 8 in 10 firms have deployed, or are deploying, a segmented production strategy. All of the largest firms, those over US$5bn in revenue, said they use this strategy, underscoring that as companies scale, they are forced to pursue segmentation, proving that segmentation strategies are becoming more mainstream.

Companies confessed to a disconnect between decision making and execution, between technology and processes, between suppliers and manufacturers, and between retailers and suppliers. However, responses also reveal that companies are aware of these gaps and are trying to pull the right levers to close them.

Click here to view the full report.