CIO Agenda 2021: Invest in Your Supply Chain (Before It’s Too Late)

October 21, 2020

Contributor: Kasey Panetta

During the COVID-19 pandemic 51% of CIOs reported a decrease in basic IT equipment due to supply chain challenges.

COVID-19 demonstrated how costly a fragile supply chain can be for organizations. When the pandemic became a global issue, organizations shut down, as did borders and governments, which left businesses scrambling for alternate supply chain options. Much of the challenges came from the speed at which things were delivered, with 51% of CIOs reporting a decrease in basic IT equipment.

“ Leaders don’t expect that COVID-19 will be the last major disruption ”

Although slow speeds are not a trend CIOs expect will continue in 2021 — 51% foresee  an increase in supply chain delivery speed — leaders also don’t expect that COVID-19 will be the last major disruption. Moving forward, they are preparing their organizations and bracing for other potential hurdles. 

This is a graphic from the Gartner 2021 CIO agenda depicting shifts in supply chain funding.

Top-performing companies are revamping supply chains to be more resilient; 40% say they will duplicate key suppliers to create more redundancy. Top performers are also bringing more businesses in-house as well as more sales and delivery. This is a shift from past years, when enterprises focused on developing the lowest-possible-cost supply chains to remain competitive.

Duplicating suppliers creates a more expensive supply chain, but also a more resilient one. Further pulling all those pieces back into the business, whether it’s sales, delivery or anything else, requires major business model changes — from talent shifts to contracts. 

The bottom line is that organizations don’t know what the future holds, but aggressive changes to business models at top performers reflect a desire to create an organization that can respond to whatever happens in the world. The goal is no longer the cheapest or highest-quality suppliers, but rather what will allow organizations to survive the next disruption

What to do

Creating a resilient supply chain will add cost, but CIOs can highlight technologies that will help mitigate some new expenses. For example, hyperautomation can enable manufacturers to locate factories closer to markets, yet remain competitive. 

Consider how other organizations are changing their supply chains and use crowdsourcing to create a platform where supply chain executives can submit their bold ideas. This will produce a diverse group of opinions, and reduce groupthink and tunnel vision. 

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