The pandemic exposed just how much the supply chain can make or break a company’s success. It has also revealed hidden vulnerabilities. And in the process, the crisis has moved Chief Supply Chain Officers (CSCOs) to the forefront of change. The days when their sole focus was on cost management are gone. And there is no turning back.
Eighty-one percent of supply chain leaders say that the pandemic has been their organization’s greatest stress test.
From supporting new customer experiences to driving profitability, expectations that were taking shape prior to the pandemic quickly gained momentum during the crisis, taking on new urgency. In this environment, is it any surprise that nearly half of executives say that the CSCO is an enabler and driver of top-line growth?
Given that the supply chain is the lifeline of the business, all eyes are on its leaders to transform it to flex with fluctuating demand and redefine resiliency. Every decision must be grounded in customer needs and environmental and social responsibility—from sourcing to third-party logistics partners.
Relevancy, resiliency and responsibility are the new triple mandate for supply chain functions. In response, many are investing to avoid the pitfalls of 2020 and prepare for what’s next. However, progress is hampered by a lack of visibility across the value chain as well as by significant resource, technology and funding limitations.
To move past these limitations and deliver on their new mandate, supply chain leaders need a digital-powered, data-driven operating model.
Accenture's global research indicates that operating maturity is advancing among global organizations. Our research and experience reveal four levels of operations maturity: stable, efficient, predictive and future-ready. Each level is grounded in and enabled by progressively more sophisticated technology, talent, processes and data insights.
On average, we found future-ready organizations to be:
Supply chain leaders say that their function’s operations maturity has improved, and they are optimistic about more progress in the next three years.
Three years ago, just 16% believed their organization had predictive operations. None had future-ready operations. Today, 4% call their operations future-ready while 65% see them as predictive. By 2023, 34% expect to be future-ready (Figure 1).
Percent of supply chain leaders achieving each level of operational maturity
Scale for the future of supply chain operations
To understand more about operations transformation, consider how we measure future-readiness. It reflects an organization’s ability to scale eight characteristics of operating model maturity: analytics, automation, data, stakeholder experiences, artificial intelligence (AI), business and technology collaboration, leading practices and workforce agility.
Supply chain leaders are very confident that their organizations are widely using all eight characteristics today, with business and technology collaboration being the most widely used and AI being the least widely used (Figure 2). This begs a key question: if organizations are doing so well in all these areas, why do only 4% of supply chain leaders identify their enterprise as future-ready?
The answer comes down to scale. Predictive organizations haven’t yet reached scale in these eight characteristics, whereas future-ready organizations are already there. As Figure 3 shows, a much smaller group of supply chain leaders see this happening today.
Operations characteristics in wide use
Operations characteristics at scale
We have identified three things supply chain leaders must know to accelerate their move towards a future-ready state.
01. Know the ultimate goal
Make relevancy, resiliency and responsibility your North Star and focus on increasing supply chain leaders' technology quotient (TQ). Learn more.
02. Know the key steps
Automate at scale, augment talent with AI and use the power of cloud to create a "digital data thread" that delivers insights across the supply chain.
03. Know how to leapfrog maturity levels
Tap into multiparty systems to establish trust, transparency and accountability. Strengthen technology ecosystem partnerships to extend innovation.
The supply chain is the lifeline of every organization and the customers it serves. The events of 2020 put this into sharp focus, pushing supply chain leaders into uncharted and unsettling territory. Moving forward, these leaders will continue to be challenged. But these challenges have a silver lining—the opportunity for a relevant, resilient and responsible supply chain that delivers for all stakeholders. It all hinges on an intelligent operating model.
Think big and go beyond incremental change to capture value at the "seams" in organizations with siloed supply chain.
Enhance intuition with the highest-quality, diverse data and integrate structured as well as unstructured data to drive superior supply chain outcomes.
Scale automation and analytics, AI and integrated solutions with leading practices to drive the full benefits of obtaining and cleansing diverse supply chain data.
Foster a specialized human + machine workforce to strike the optimal balance between people and technology in operating the supply chain.
Put cloud infrastructure at the heart of the supply chain to drive cost efficiency, scalable capacity and sustainability.
Build complementary third-party and ecosystem relationships to continually innovate across the supply chain.