Five Ways to Drive Growth Through Your Supply Chain

Editor’s Note: Kris Timmermans is senior managing director of Supply Chain & Operations Strategy for Accenture Strategy.

Gary Hanifan is managing director of Supply Chain & Operations Strategy for Accenture Strategy.

Today's supply chain leaders are in the driver's seat when it comes to generating business value. Chief supply chain officers (CSCOs) and chief operating officers (COOs) have long been the orchestrators of supply chain networks. Now, they are increasingly the architects of growth for their businesses because the supply chain is no longer just a support function—it has become an engine of new business models and customer experiences.

This transformation requires a new supply chain strategy—a strategy that is structured around the flexibility and scalability powered by digital technologies. With such a strategy the supply chain doesn't just enable growth, but actually drives and creates it by allowing for quick movement into new geographies, informing new product and services, and meeting ever-changing customer expectations.

Turning this growth potential into a reality requires a reimagination of the supply chain as a digital supply network that drives differentiation. Customers are at the center of this transformation – according to our research, supply chain executives see rising demands from customers for a wider selection of products (71%), that are customized (76%), reliable (73%), sustainable (69%) and delivered as rapidly as possible (76%). Customers are quickly becoming segments of one, each with their unique needs, behaviors, and preferences. And every one of these segments can generate incremental growth, so companies simply can't ignore them.

We examined what it takes to seize the opportunity at hand at the second annual Next-Generation Operations Summit—a meeting of the minds of more than 30 future supply chain leaders held at Harvard University. Through peer dialogue, ideation sessions and case studies of some of the best in the business, we identified five ways that supply chain leaders can power growth—starting today:

1. Find your purpose

   Your supply chain is no longer just a means to get products from Point A to Point B. It needs to be the vehicle to enable your company's purpose. For instance, our pre-summit survey found that 86 percent expect the environmental impact on the role of the COO/CSCO to be significant in the next five years. A consumer goods organization for example might have the purpose to be the most environmentally responsible company in their segment. That company's supply chain leaders can identify ways to reduce environmental impact through the supply chain, use analytics to ensure ingredients are sustainably sourced and make energy usage renewable.

   Showing that your business is doing good for society may ultimately be a driver of growth. When customers know your purpose and believe in it, they might not just buy from you, but also buy into you.

    

2. Balance the core and the new

   Supply chains were initially built for efficiency, which is still a core objective, but now as supply chains become digital, networked and centered on customer outcomes, COOs and CSCOs need to keep one foot in the present (for stability) and one in the future (for innovation). Many have focused too much time on the present, optimizing supply chain capabilities. That is table stakes. Leaders must also cultivate a supply chain that is dynamic and flexible enough to adapt to rapidly changing environments and requirements, while also generating new business value.

   Straddling the past and the future is no easy feat. One vice president of global industry operations at a consumer goods company commented, “You can only eat an elephant one bite at a time,” highlighting the criticality of managing immediate change now, while also looking ahead. Leaders can do so by taking advantage of new technologies, such as artificial intelligence and blockchain, and encouraging collaboration between humans and machines. Entire cultures will need to think and work differently, and that will require ongoing change management.

    

3. Unleash the power of human + machine

   Technology has become more than a tool—it's a means to help supply chain leaders imagine what is possible and, more importantly, achieve it. Yet technology continues to be the elusive shiny object. How can leaders identify which emerging technologies are most important? How can they employ technology to drive business value via the supply chain? It comes down to experimentation.

   Some supply chain leaders told us they are using blockchain to bring greater clarity to information ownership. It can help establish a single system of record, reduce paperwork and improve customs compliance. Others are using artificial intelligence to automate processes that do not require human intervention, such as inventory reconciliation. Taking tasks off the hands of people allows workers to focus on more strategic activities that add value. Analytics continues to be an undoubtedly powerful means to improve product segmentation and demand forecasting—making a direct impact on revenue.

   As one senior vice president of supply chain at a frozen foods manufacturer commented, “We are trying new technology—augmented reality, IOT. A number of them will fail, but we'll try to see how they can deliver value.” There is no one-size-fits-all approach to technology in the supply chain. But it is essential to experiment with new technology that can augment the work of people who then can spend more time on innovation that fosters growth.

    

4. Share the supply chain with the ecosystem

   No business leader needs to go it alone in today's shared economy. Technology has blurred the lines between industries, opening the door to new types of ecosystem collaboration. Competitors can be comrades. Frenemies will become business partners.

   As one executive vice president of global supply chain for a retail company noted, “We're talking about ‘my' supply chain rather than “ours.” External partners can provide assets and services to customers. Digital platforms can connect supply chain assets, people, processes and things to increase collaboration and benefit the greater whole.

   Ecosystem partners not only fill gaps in capabilities and talent, they can help supply chain leaders to think outside of the box. Imagine presenting a business challenge for top minds at local university to tackle. Supply chain leaders of the future will not be afraid to look beyond the four walls of the enterprise to find new sources of answers, innovation and growth.

    

5. Retool talent and teams

   Supply chain teams will become more diverse than ever. Having “techies” is good, but these brilliant data scientists and system engineers must work side-by-side with creative problem solvers who can get to the root of a business challenge and figure out how technology will help. And the supply chain leaders at the helm of it all need to be good communicators, storytellers and able to sell the business case.

   Teams must be retooled with the right skills to support the supply chain of the future. This calls for a patchwork of talent—from domain experts to customer service superstars and operations gurus. Some of this talent may be found in house outside of traditional supply chain roles. Or current supply chain employees may need to be upskilled or reskilled to add new value. In some cases, ecosystems will be the best place to tap the right people. Some companies are getting creative with enhancing the supply chain workforce. At the Summit we discussed a case study where a leading telecom company assigned “digital ninjas” (who were digital-savvy millennials) to top executives at the company to do reverse mentoring on the latest technologies. These executives learned about the latest technology in a fun, safe and comfortable environment.

   In the end, success will come from tapping into innovative thinking and important skill sets. A director of supply chain digitization for a retail company said, “Companies must look at skills relevant for the new normal. What made us successful yesterday may not be what takes us forward.”

Growing forward

Technology is evolving at warp speed. Consumer preferences are fickle and fast-changing. And the supply chain workforce is in the middle of a transformation. COOs and CSCOs cannot predict what will happen next, but they can take steps now to be ready for whatever is around the corner. Those who build the capacity to adapt in the supply chain will be agile enough to create business value and drive growth, no matter what the future brings.

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