How can you make your supply chain future-ready?
October 11, 2021
For the first time in my 26-year career as a supply chain professional, I don’t have to explain what I do for a living to my friends and family. Thanks to the disruptions caused and exacerbated by the pandemic, EVERYONE knows what supply chains are.
The topic of supply chain has never received so much attention and awareness by the public as it has in the past year. According to Factiva, published articles on supply chain were up 45.1% year-over-year in 2020. The news has been dominated by stories and pictures of empty shelves at retailers, idle automotive assembly lines, and container ships waiting to be unloaded. While there are many opinions on the correct way to secure future supply chains, the only agreement seems to be that traditional approaches aren’t enough and new ones are needed.
Chief Supply Chain Officers realize that accelerating digitization of supply chains is essential, yet current digital maturity is still stuck in pilot phase.
The classic view of supply chains as cost centers still exists, but it no longer works. Focusing solely on efficiency makes it difficult to weather disruptive events like pandemics or hurricanes. And, when cost is your lens, it’s also very hard to delight customers and meet new expectations for doing right by the environment and society.
The solution? Supply chain strategies need to transform, driven by three main characteristics that suit today’s business environment: relevant, resilient and responsible.
Relevant. Supply chains must successfully adapt to what their customers value, while continually decreasing the resources required to deliver it. Getting it right includes:
Resilient. Supply chains must protect their customers, their company, and their partners from demand and supply shocks. That requires:
Responsible. Supply chains must evolve to operate in ways that are good for the planet and society, to establish, maintain and enhance trust with all stakeholders. Everlane providing one-click transparency on each of its factories or a multinational conglomerate assessing human rights risks across its supply chain are excellent examples. Leaders in this area are already redefining how they assess a supply chain’s value by considering the needs of all stakeholders, not just customers and shareholders. The expectations of governments, employees, citizens, and partners continue to evolve.
Supply chains won’t naturally develop to become relevant, resilient, and responsible; companies need catalysts for change. Accenture research shows two ingredients are critical for success: attention by senior leaders and investment in key technologies.
Our recent survey shows that only 52% of CEOs are driving supply chain transformation discussions with their board of directors, and only 53% of CEOs are allocating funding to drive supply chain innovation. Talent allocation is a challenge, too—only 49% of CEOs allocate their top talent to the supply chain.
Digital transformation is also critical to rebuilding supply chains. Supply chain breakdowns during the pandemic were amplified by lack of visibility, slow response to events, and overreaction to supply and demand shocks—all situations digital supply chains can improve. To become future-ready, eight out of 10 CSCO’s realize that accelerating digitization of supply chains is essential, yet current digital maturity is still stuck in pilot phase (averaging 39% on the digital maturity index) and hindered by aging legacy technologies and lack of funds.
The pandemic has provided some hard lessons for businesses around the world, shining a bright light on supply chains. If it’s shown us anything, it’s that small, iterative improvements aren’t the way forward. Radical transformation to support a new era is required. After all, the best supply chains are invisible—they just work, for their companies, employees, customers, and the planet.
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