While most companies recognize the value of a digitally enabled supply chain – empowered by new technologies like artificial intelligence, blockchain, big data and analytics – many chief supply chain officers (CSCOs) are not leveraging their C-suite counterparts to help reinvent the supply chain function, according to new research from Accenture, Chicago.
The report, “Drive Your Own Disruption: Is your supply chain in sleep mode?,” reveals that the 900 supply chain executives surveyed were more likely to say that they see their function in two years as a cost efficiency driver (60%) or a support function (68%) rather than as a competitive differentiator (48%) or a growth enabler (53%) within their organizations.
“Supply chain executives should take no comfort in being categorized as a support function,” says Mohammed (Mo) Hajibashi, managing director at Accenture and global supply chain lead in the 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.”
Research found that 80% 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, the CSCOs blame the absence of a clear business strategy (cited by 43% of CSCOs surveyed), together with an inadequately skilled workforce (48%) and incompatible legacy systems (44%).
How to overcome C-suite challenges
According to the report, CSCOs have an opportunity to work with the full C-suite to overcome three core challenges – leadership, labor and legacy technology – and move their function toward better and more strategic partnerships that will provide the organization increased value-driving potential.
- 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, such as the CFO and COO.
- Labor. CSCOs need to build a workforce that 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 CSCO will also need to leverage their C-suite connections to secure support for a re-skilling strategy founded on continuous learning.
- Legacy technology. Digitally decoupling legacy systems provide a less-resource-intensive and more impactful way to drive agility than spending on new, more compatible systems. CSCOs can start by decoupling data from their legacy IT systems, replicating it and moving it in real time to cloud-based data “lakes” that are accessible to customers.
About the research
Accenture polled 900 chief supply chain officers, chief operating officers, chief procurement officers and other supply chain leaders from 12 industries (aerospace and defense; chemicals; consumer goods and services; electronics/high-tech/communications; financial services; healthcare; industrial equipment; life sciences; government/public service; retail; energy; and utilities) in seven countries (Austria, Canada, Switzerland, Germany, the UK, Ireland and the United States). The survey was conducted from December 2017 and February. All surveyed companies had annual revenues of at least $1 billion.