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.

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8 out of 10

Chief Supply Chain Officers realize that accelerating digitization of supply chains is essential, yet current digital maturity is still stuck in pilot phase.

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Moving beyond “supply chain as cost center” thinking

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:

  • Responding quickly to customer and market driven changes. To do this, teams need to eliminate the typical consensus-building demand planning process and instead create a unified view of demand. Accenture’s global supply chain practice lead, Kris Timmermans, explains the ins and outs here.
  • Providing tailored experiences for customers based on their unique needs. Leading supply chains are pursuing hyper-personalization (B2C) and product-as-a-service models (B2B).
  • Automating the use of data and analytics to support smarter planning and execution.
  • Finding the right balance between in-house capability vs. outsourcing. The secret is to integrate key capabilities that are too valuable to trust to others.

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Resilient. Supply chains must protect their customers, their company, and their partners from demand and supply shocks. That requires:

  • Building supplier, manufacturing, and logistics networks methodically. They should be responsive to customers, resilient to disruption, and efficient with resources—a tall order, to be sure. They’ll need strong innovative partners to succeed, so partner selection criteria need to evolve beyond just cost or quality.
  • Improving visibility and responsiveness with technology. Tools like Intelligent Execution Control Towers can monitor conditions across the supply chain and take action in real time, with minimal human intervention.
  • Using standards to ensure all partners in the ecosystem meet resiliency requirements (like the Accenture/MIT Resilience Stress Test).

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.

Two catalysts for change: Human + machine

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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.

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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.

Are you future-ready?

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.

See more Supply Chain & Operations insights.

Stephen J. Meyer

Principal Director, Supply Chain & Operations Research

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