When you’ve advised companies on supply chain strategy and solutions as long as I have, you realize there are very few unique challenges. When faced with a major supply chain challenge or the need for transformation, many Chief Supply Chain Officers (CSCOs) feel very alone. But they’re not. Whatever they’re facing, other companies and CSCOs are also.
As I counsel clients, three main business challenges are coming to the fore now—challenges magnified by COVID-19 impacts. CSCOs are trying to make their supply chain more agile. They’re aiming for true collaboration across the supply chain for better outcomes. And they’re looking to accomplish these feats while showing greater responsibility and sustainability.
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While there are many ways to approach these challenges, at Accenture we are helping companies work hard (and smart) on the following solutions:
- Flexibility: The ability to differentiate customer offerings on demand.
- Ecosystem Design: Identifying the right partners to innovate and provide assets/services on demand.
- Digital Architecture: Technology architectures designed to drive cross collaboration and co-innovation.
- Innovation: A robust data and analytics capability that enables scale beyond prototype testing.
- Visibility: End-to-end, real-time visibility that creates trust and transparency for customers.
I am sure your company is facing at least a couple of these challenges, particularly since COVID-19 has put a heavy strain on supply chain operations. I’m seeing that strain reveal the fault lines in supply chains that previously appeared healthy.
I’m here to share some good news, though. Companies around the globe are addressing these challenges head-on, repairing fault lines with supply chain transformation. And it’s working.
For instance, Accenture worked with an international consumer goods company who had a very decentralized and siloed organizational setup. When COVID-19 began to hit various geographies hard, of course the company saw both supply and demand volatility increase sharply. It was essential that they keep their products flowing to the right places. But they realized very quickly that their decentralized siloes made rapid, wise decision-making difficult.
When faced with the situation, instead of continuing to work with a less-than-ideal framework, the company made the hard but smart decision to change it. A major change can be challenging under normal circumstances so I applaud them for making this one in the middle of one of the most stressful scenarios they’ll likely ever face.
To remedy the situation, they centralized company data and created a digital twin capability. This allowed company supply chain and operations leaders to improve decision making at the “nerve center” to support market challenges. It has proven an invaluable mechanism to align decisions across the company. Working from data that is entirely fact-based, their decisions can now be more rapid, targeted and integrated.
Additional benefits included:
- Better modelling and scenario planning because of the digital twin capability
- Visibility into short-term demand changes
- Mid-term forecasting to judge the recovery curve
- Optimized portfolio agility, allowing for substitution and simplification
Think about this. With one brave, bold move, this company’s Chief Supply Chain Officer started to address almost all of the main challenges supply chains face. There’s more work to do, of course, but he accelerated his company’s transformation.
In the COVID-19 era, as companies across industries see volume shift from traditional channels into e-commerce or new channels, it accentuates unpredictability and supply chain cost increases. Consumers who used online channels for less than 25% of their purchases before the pandemic hit show an average 160% increase on average, globally. This is just one of many shifts, from an increase in consumer demand for product traceability and sustainability to a preference for companies that they feel share a purpose beyond profits.
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Consumers who used online channels for less than 25% of their purchases before the pandemic hit show an average 160% increase on average, globally.
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As your company deals with these shifts, remember that you are in good company. Your peers across the globe are struggling to deal with many of the same challenges your supply chain is. Use technology to its fullest value now. Use the current crisis as a catalyst to do what you would eventually have needed to do to remain competitive to meet new consumer and customer demands.
If you’d like to hear more stories about how supply chain executives are helping to change not only their companies—but the world—for the better, well I have plenty of those. You can also find more on our Accenture Supply Chain and Operations homepage. And I’m always happy to elaborate on supply chain innovation, as well as to talk about the technology solutions and strategies that underpins it.