Insights from the Virtual Summit Series with Accenture and Harvard Faculty
In recent years, the role of supply chains has evolved beyond efficiency to growth. But in the era of COVID-19, supply chains became a literal lifeline.
Supply chain leaders had to adapt to unprecedented volatility overnight. Existing challenges were amplified. Trends were accelerated. Consumer preferences and behaviors shifted dramatically—and it’s not stopping any time soon. As one chief supply chain officer recently noted in our Virtual Summit Series with Accenture and Harvard Faculty, “There is no post-COVID, there is only living with COVID.” So how do we adapt to these dramatic changes while staying sharply focused on growth?
Refocusing on growth as we adapt to today’s turbulence
Accenture’s 2020 supply chain research surveyed top executives at 900 companies across nine industries globally to understand how they are transforming their existing supply chains into ones that deliver growth. We found that leaders are addressing issues related to flexibility, ecosystem design, technology, innovation and visibility. Since these challenges have been exacerbated during the pandemic, there is no better time to focus on solving for what’s next and refocusing on driving growth through the supply chain.
Our research found that companies invested, on average, more than $150 million in their supply chains over the past 2 years, but only 10% are effectively using those investments to transform their supply chains to meet new customer experience demands. There is a small group of leaders—we call them “Masters”—that are taking action in several key areas:
Understanding demand patterns: What’s up and what’s down?
Supply chain Masters are thinking about how to best leverage digital investments to have real-time visibility into patterns, especially from a demand sensing and shaping perspective. Data is the lifeblood that can help organizations be better equipped to sense and respond to rapid fluctuations. People are buying differently. Some categories have collapsed while others have exploded. By understanding in real time what people are buying, the organization can ramp up production quickly to get customers the products they want and need—without delay. This visibility also creates a foundation for collaboration both inside and outside of the organization with ecosystem partners who can help you do things better and faster.
At our recent Summit session, one attendee noted that his consumer goods company had recently undergone a digital transformation in which they set up (and “hydrated”) data lakes, which helped enable their response during the pandemic. They are receiving information from around the world daily in real time, and by using analytics and a business intelligence dashboard, they are making informed decisions at speed.
Putting the customer first: The supply chain shouldn’t end at the customer; it should begin there
The Masters begin with the customer in mind. They base their supply chain strategy on what the customer values, which is a more complex endeavor than it used to be because customer experience is now so tailored and personalized. Adding complexity is the fact that what customers value has changed during the pandemic. People are more conscious about how products are sourced. Our recent consumer goods research found that 62% of consumers say the pandemic will increase their focus on the environment.1 People want to work with companies that take sustainability to heart.
Consumers are shopping more online. We expect a 160% increase in e-commerce purchases from new or low-frequency users.2 So, supply chain leaders must figure out the best way to serve customers efficiently and responsibly in this new omnichannel environment.
In B2B and B2C companies, supply chain Masters are working on a seamless, connected customer experience. One consumer goods company created hundreds of segments to represent all of the company’s customer/product combinations. For each of these segments, they defined a complete set of supply chain requirements. It takes time, but leading with the customer at the center of the strategy will allow the levels of intimacy and accuracy that people have come to expect.
Operating with agility: When flexibility is a necessity, you need the right capabilities
When the pandemic first struck, supply chain leaders needed the agility to respond immediately. Some had to convert factories almost overnight to produce essential materials, such as sanitizers. Now that the initial shock has dissipated, it is time to focus on resiliency enabling ongoing response to fluctuating supply and demand and wavering consumer preferences. Masters are rapidly developing key customer-experience capabilities and are ahead of their peers in implementing these capabilities, which gives them greater supply chain agility.
For B2B, Masters are investing in blockchain, design to margin capabilities, and customer and product segmentation. B2C Masters’ top three capabilities they are investing in include customer and product segmentation, cyber security and data privacy, and design to margin capabilities.
It’s time to grow
Priorities had to change quickly to manage the unprecedented disruption of COVID-19. Many addressed the challenge head on—and learned a lot in the process. Supply chain leaders in B2C and B2B businesses found that the issues they faced pre-crisis are here to stay. Now, by addressing these core issues, supply chain leaders can set a course for future growth that will help the business be prepared for whatever is around the corner.
All data is sourced from Accenture’s 2020 Supply Chain research, unless otherwise noted.
1 “10 Trends impacting CPGs,” Accenture, 2020.
3 “Innovate for Cyber Resilience,” Accenture, 2020.