At the start of 2021, supply chain leaders were cautiously optimistic about the future. The first vaccines had been approved, trade tensions were easing, and many expected the COP26 conference would provide a clear action plan for tackling climate change. All in all, 2021 looked to be a return to normal. But that didn’t turn out to be the case. Now you, as a chief supply chain officer (CSCO), must prepare for even greater uncertainty in the years to come
“If there’s one upside to this situation, it is this: We all have reached a collective moment of courage for reinvention,” says Suzie Petrusic, Director Research at Gartner. “That’s why reinvention is the theme of this year’s Future of Supply Chain report. We, and the 900+ global supply chain leaders surveyed, view the next three to five years as a critical time where supply chains must reinvent themselves.”
Four shifts are driving the future of supply chain
Gartner has identified key changes to consider to better prepare for the road ahead.
Shift No. 1: From location-centric to human-centric work design
Technological advances have made remote work a realistic possibility for some time, and younger workers especially have long argued for more flexible work setups. The pandemic hastened the pivot to remote, and enterprises were left with no choice but to embrace it. Now there’s no way back; 61% of respondents to the Future of Supply Chain survey agree that the recent acceleration of remote work will create a permanent hybrid work model, even at the front line.
To prepare for this shift — and not lose the race for talent — work design must be more human-centric. One key is to find ways to increase flexibility through, for example, offering alternative work models such as part-time hours, and technological solutions like augmented and virtual reality that provide frontline workers with greater independence regarding their location.
Shift No. 2: From real-time analytics to real-time decision execution
Most supply chain leaders agree that enterprises will expect their supply chains to execute in near real time on more accurate and consistent decisions to deal with the increasingly volatile and fast-evolving nature of the markets. For this to happen, access to real-time data for analysis and decision making, and the capabilities to perform that analysis immediately, are imperative.
Survey results suggest that many supply chain leaders currently focus on real-time decisions but delay investments that would enable real-time execution like smart factory and hyperautomation capabilities. This choice could lead to a scenario in which a supply chain would know exactly what to do but lose that competitive advantage due to a delayed response. You must look to balance your investments to avoid falling into this trap.
Shift No. 3: From ambitious action to authentic achievement of sustainability
Stakeholder pressure often translates into public statements from CEOs that promise to expand diversity, equity & inclusion (DEI) efforts, increase sustainability and protect customer data. It’s not surprising that supply chain leaders predict a future where authentic achievement of social responsibility — including responsible use of data — and environmental sustainability must replace today’s focus on ambitious action.
Customer expectations around social and environmental impact span the value chain and include how organizations source, make, package, deliver, return and destroy products and services. While customers are willing to pay for this, they will also punish inaction and insufficient efforts. This means you must invest in visibility and transparency tools — and hold your partners accountable for their impact on the world as a whole.
Shift No. 4: From operational excellence to commercial innovation
As enterprises innovate, many are looking to expand the role of supply chains. Supply chain leaders predict a shift in expectations from operational excellence to commercial innovation — a novel way to directly grow the top line by developing new and different offerings focused on commercial growth. To truly innovate, organizations must look beyond the product and think about everything the enterprise can offer, such as packaging and fulfillment services.
To master this shift, first build the capabilities to better understand your customers. Invest in access to voice-of-the-customer (VoC) data, which can help you understand what your customers actually want. At the same time, make a concerted effort to shift the organizational culture toward customer-centric decision making.
Currently only about 40% of supply chain leaders are investing in the executive roles necessary to lead this new commercial effort, and only one-quarter are embedding new customer experience roles into their organization chart. Dynamic and forward-thinking investments like these are vital for the supply chain to evolve to fit today’s constantly shifting global marketplace.
The uncertainty in today’s world shows no signs of letting up, and it’s time to rethink old supply chain models.
We’ve identified four major changes that will help leaders understand the new keys for success.
By embracing work flexibility, preparing for real-time performance of last-minute decisions, striving for authentic sustainability and focusing on commercial innovation, your organization’s supply chain will thrive — no matter what the future holds.
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