Accenture study shows only 4% of supply chain leaders are ‘future-ready’
At a Glance
The migration from the offline world to the virtual business model has been immense. Many companies were faced with problems to which there were no simple solutions. According to a recent study from Accenture, 81 percent of supply chain leaders believe the pandemic has been their organization’s toughest stress test, and they’re dealing with technology change at a record pace and scale. Many supply chain operations are still restricted by old legacy technology, requiring a patchwork of digital and non-digital systems to function. Businesses should increase cloud spending to support digital supply chains and foster ecosystem partnerships.
The pandemic has helped many companies grow. There has been an unprecedented upsurge in digital transformation. The migration from the offline world to the virtual business model has been immense. But all this was a simple task. The path was not easy. Many companies were faced with problems to which there were no simple solutions.
According to a recent study from Accenture, 81 percent of supply chain leaders believe the pandemic has been their organization’s toughest stress test, and they’re dealing with technology change at a record pace and scale. And, only 4% of people believe they’re “future-ready,” while 34% hope to be by 2023. According to the study, Accenture discovered that “future-ready” businesses are twice as efficient and three times more profitable than their counterparts.
The study says, “The pandemic exposed just how much the supply chain can make or break a company’s success. 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.”
In comparison to “stable,” “efficient,” and “predictive,” Accenture utilizes the designation “future-ready” to signify its greatest degree of operational maturity. According to the company, 4% of supply chain leaders in this category have torn down silos and provided real-time insight across the value chain. They’ve also reskilled and changed their workforces to stay up with and adapt to change.
Accenture partnered with Oxford Economics to poll 1,100 executives worldwide, 44 percent of whom were C-level or equivalent. The survey included CEOs from 13 industries and 11 countries, and Oxford Economics conducted 12 in-depth, off-the-record interviews with them.
Overall, the most significant problem for supply chain executives is a lack of a coherent strategy and technology. Many supply chain operations are still restricted by old legacy technology, requiring a patchwork of digital and non-digital systems to function. This inhibits businesses from realizing the benefits of data-driven insights, such as the capacity to forecast and monitor every step along the way.
“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. The notion of real-time visibility [took] on new meaning and urgency for businesses.”Manish Sharma, a group CEO of Accenture Operations, told VentureBeat
He added that lockdowns in the early days of the epidemic intensified this tendency, causing significant supply chain disruptions.
According to the study, despite these obstacles, supply chain leaders are generally optimistic in their organization’s capacity to broadly employ data, automation, AI, and other future-ready features. Furthermore, most CCSOs polled indicated their organization’s operations maturity has improved, and they expect further development in the next three years.
According to the research, to kickstart digital transformation, you’ll need to know the end objective, processes, and how to leapfrog maturity levels. It claims that by thinking holistically about strategy and technology, supply chain professionals can create value at the ‘seams’ and begin crossing silos.
Mr. Sharma suggested that businesses should aim to grow automation to supplement human skills and commit to using better data and AI to make insight-driven choices.
Businesses should increase cloud spending to support digital supply chains and foster ecosystem partnerships, he said. The pandemic aided the latter; 39 percent of survey respondents stated the pandemic prompted their companies to place a greater emphasis on partner connections.
“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. 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.”Mr. Sharma added,