As I talk to Chief Supply Chain Officers about their top priorities, growth is the new end game. Their CEOs don’t just expect efficiency anymore; they want supply chains that contribute to business growth. And Accenture’s latest supply chain report details how the top 10% of supply chain leaders—we call them Masters—are creating better results, financial and otherwise.  
One of the ways they are fueling growth is through developing and delivering product-as-a-service, which is essential to an intelligent supply chain. We found that, of the 900 companies Accenture surveyed, 50% have chosen product-as-a-service models as one of their top five priorities for supply chain investments.  

Companies selling product-as-a-service are essentially selling additional outcomes or solutions to their customers, as opposed to just a physical product—and the result is new revenue streams and incremental value for their end customer. However, this relies on companies treating data as the new currency that feeds new value across their supply chain. In fact, we found that over 60% of Master’s average revenue growth came from collaboration, innovation, and data- and insight-driven technologies.

So what's standing in the way?

Though most executives recognize the importance of product-generated data, they struggle to harness its value. I see many companies that want to democratize data-driven insights across their operations to foster better collaboration, but they are tripped up by the execution and don’t know how to create connections across supply chain silos. Without this interconnectivity – enabled through a unified insights platform, a common data foundation and training/enablement around how to apply these data-powered insights – the supply chain struggles to flex in real-time to what customers want.

Connected products open the door for connected services

And make no mistake – breaking down these data silos is a pre-requisite to truly realize the business- and customer- benefits of products-as-a-service. As products become increasingly software-driven, smart, and connected, they open up a wealth of possibilities for transparency, traceability, and transferability of insights across an organization. Companies are harnessing the data generated by these smart products, using data and AI enablers and capabilities, like blockchain, Artificial Intelligence (AI), the Internet of Things (IoT), and robotics, to help them design more connected and agile supply chains that deliver better customer experiences while opening up new revenue streams. Airbus, for example, is collecting data from its helicopters to better target new services, like predictive maintenance schedules. Not only does this help Airbus create a better customer experience by drastically reducing service disruptions, but it also creates new revenue streams, such as fleet availability monitoring and proactive parts replacement.

The modern supply chain requires new types of agility

Product-as-a-service is all about using applied intelligence to manufacture, design, and deliver better products and services. Recycling that intelligence improves your overall supply chain and makes it more agile. Agility means you can not only deliver product-as-a-service, but also pivot and adapt it in almost real-time. In fact, our research found that 47% of Masters have invested in building mature capabilities, which includes predictive, optimization and simulation models. This enables them to service the entire product lifecycle, and then leverage applied intelligence for service performance analytics. 
For example, in the circular economy, the product-as-a-service model enables products, and the insights derived from them, to be returned rather than discarded after use. Using analytics, companies can maximize the recovery value of these products, driving greater resource productivity.  
Accenture worked with a mobile communication company struggling with excessive costs due to supply and demand uncertainty, lack of insights into spare parts availability, repair center limitations and more. However, Applied Intelligence helped them leverage data and AI to develop intelligent solutions and accelerators that enabled them to make data-based decisions in real time to optimize inventory and improve profitability, ultimately saving more than £10 million in returns and repair processes.

A sustainable, intelligent supply chain

Product-as-a-service is not only good for customers and companies, it’s good for the environment, contributing to a sustainable supply chain. The intelligent supply chain uses product-as-a-service in a sustainable way to help it achieve maximum efficiency, fuel growth and contribute to the greater good of society as a whole. If you’d like to learn more about how companies are designing intelligent supply chains that suit their unique needs, you can find more information here.  
It’s more important than ever, as we all navigate the supply chain implications of COVID-19, to use intelligent technologies to their maximum value. That means moving beyond simple efficiencies into true, transformative growth. The intelligent supply chain can help you get there. 

Jaime Rodriguez Lagunas​​​

Managing Director – Applied Intelligence, Supply Chain & Operations Global Lead

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