We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 - 28. Join AI and data leaders for insightful talks and exciting networking opportunities. Register today!
The pandemic accelerated digital transformation, but that doesn’t mean change comes easy. According to new research from consulting company Accenture, 81% of supply chain leaders say the pandemic has been their organization’s greatest stress test and that they’re facing technological change at “unprecedented speed and scale.” What’s more, only 4% say they’re “future-ready,” while 34% expect to be there by 2023. The research also underlines the need for enterprises to get up to speed — “future-ready” organizations were found to be twice as efficient and three times more profitable than peers, according to Accenture.
“The pandemic exposed just how much the supply chain can make or break a company’s success,” the report states. “It has revealed hidden vulnerabilities. And in the process, the crisis has moved Chief Supply Chain Officers (CSCOs) to the forefront of change. The days when their sole focus was on cost management are gone.”
Accenture uses the identifier “future-ready” to indicate its highest level of operational maturity, compared to “stable,” “efficient,” and “predictive.” The 4% of supply chain leaders that fall into this category, the firm says, have broken down siloes and enabled real-time visibility across the value chain. They’ve also transformed ways of working and reskilled their workforces to keep pace and adapt to change.
For this research, Accenture worked with Oxford Economics to survey 1,100 executives globally, 44% of whom were C-level or equivalent. The participants spanned 13 industries and 11 countries, and Oxford Economics additionally conducted 12 in-depth, off-the-record interviews with executives.
The challenges of evolution
Overall, supply chain leaders cited lack of cohesive strategy and technology as their biggest challenge. Many supply chain functions are still constrained by aging legacy technology and are working in a patchwork of digital and non-digital systems. This prevents enterprises from reaping the rewards data-driven insights could deliver, including the ability to predict and monitor every action along the supply chain. Such insights can also be used to reinvent how companies source, plan, manufacture, distribute, and recycle products, but data and integration are key.
“While the supply chain was once a linear flow of goods and services, today it exists as highly integrated networks of hundreds or thousands of suppliers,” Manish Sharma, group CEO of Accenture Operations, told VentureBeat. He says the early days of the pandemic only exacerbated this trend, as lockdowns triggered widespread supply chain disruptions. “The notion of real-time visibility [took] on new meaning and urgency for businesses.”
Despite these challenges, the research found supply chain leaders are fairly confident in their organization’s ability to widely use data, automation, AI, and other characteristics of future-readiness. Additionally, most CCSOs surveyed said their organization’s operations maturity has improved, and they’re optimistic about more progress in the next three years.
The process of transformation
To spark digital transformation, you must know the ultimate goal, know the steps, and know how to leapfrog maturity levels, the report summarizes. It argues supply chain leaders can “drive value at the ‘seams'” and start bridging silos by thinking holistically about strategy and technology.
Sharma gets even more specific, saying enterprises should look to scale automation to augment human talent and commit to making insight-driven decisions with better data and AI. During the pandemic, for example, he said Accenture helped Halliburton, which services the energy sector, with a new delivery platform that applies advanced analytics and enhanced business intelligence tools for its support teams. As part of the VentilatorChallengeUK Consortium, Accenture also helped Rolls-Royce coordinate production of ventilators urgently needed by the UK’s health service.
Sharma also recommends enterprises scale cloud investments to support digital supply chains and build ecosystem relationships. The pandemic actually helped accelerate the latter; 39% or the research participants said the pandemic pushed their organizations to focus more on partner relationships.
“Future-readiness starts with breaking down silos and executing an integrated and centralized supply chain strategy that brings all parts of the value chain together around a shared set of business and customer outcomes,” Sharma said. “Working with data-driven insights will help leaders predict and monitor every action along the supply chain and reinvent how they source, plan, manufacture, and distribute products.”
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Learn more about membership.