An apparent disconnect between the C-Suite and supply chain results in missed digital growth opportunities for many companies, according to new research.
A digitally enabled supply chain should make it easy to drive growth and improve customer experiences. Leveraging new technology—such as big data analytics, artificial intelligence with machine or deep learning, blockchain, 3D printing, and robotics—can help manage supply chain complexity, accelerate responsiveness, and speed time to market. In short, it should be a means to gain competitive advantage.
And yet, a new report, “Drive Your Own Disruption: Is your supply chain in sleep mode?” from Accenture explains that the 900 supply chain executives the firm surveyed were more likely to say that they see their function in two years as a cost efficiency driver (60 percent) or a support function (68 percent) than as a competitive differentiator (48 percent) or a growth enabler (53 percent) within their organizations, which can leave significant value on the table.
“Supply chain executives should take no comfort in being categorized as a support function,” says Mohammed (Mo) Hajibashi, a managing director at Accenture and Global Supply Chain lead in its Products industry practice. “In this digital era where customers demand speed to market and hyper-personalization, these executives need to ensure that their supply chain function is not only a key differentiator, but also ensures the sustained growth of their organizations. The fast and efficient adoption of the right new technologies that enable a new way of working, along with increased C-suite engagement with the supply chain function, are the keys to achieving growth via new digital business models that create new customer experiences—craved by the consumer.”
The report notes that 80 percent of the supply chain executives surveyed identify the chief information officer or chief technology officer—not the CEO, chief operating officer (COO) or chief financial officer (CFO)—as key stakeholders, even despite the major role the CFO has in making technology investment decisions and the COO’s role in designing the operating model.
Furthermore, in many organizations, the supply chain isn’t seen as a driver of differentiation and aggressive growth. Meanwhile, Chief Supply Chain Officers (CSCOs) blame the absence of a clear business strategy (cited by 43 percent of CSCOs surveyed), together with an inadequately skilled workforce (cited by 48 percent), and incompatible legacy systems (cited by 44 percent), for their function’s inability to drive value for the organization.
The issue then becomes identifying how CSCOs can address these challenges. According to the report, CSCOs have an opportunity to work with the full C-suite to overcome three core challenges and move their function toward better and more strategic partnerships, which will provide the organization with increased value-driving potential.
The first challenge is leadership. The CSCO will need to be better aligned with business strategy and build a new and productive working relationship with the executives responsible for long-term digital investment: the CFO and COO, according to Accenture.
Secondly, CSCOs need to address the labor challenge by building a workforce which focuses on core supply chain workers, “adaptive” (part-time and on-demand) workers, and artificial intelligence/robotics—all working together to drive productivity at speed. The report also recommends CSCOs leverage their C-suite connections to secure support for a reskilling strategy founded on continuous learning.
Finally, digitally decoupling legacy systems provides a less resource-intensive and more impactful way to drive agility than spending on new, more compatible systems, the report notes. CSCOs can start by decoupling data from their legacy IT systems, and replicating and moving it in real time to cloud-based data “lakes” accessible to customers, the report concludes.
What are your thoughts on the digital supply chain? Who do you think are the key stakeholders?