Preparing for the Future Supply Chain

Ninety-five percent of supply chains must quickly react to change, but only 7% can execute decisions in real time. Without real-time execution, the supply chain will know exactly what to do, but response execution will be delayed. As such, it is expected that digital supply chain investment in real-time decision execution will increase 5x by 2028. With the right technology and skills supporting supply chain analytics, the future supply chain will automate execution and improve performance across the end-to-end value chain. Real-time capabilities require a three-step transformation in supply chain management:

1. Access to real-time data from across the end-to-end supply chain

2. The capability to analyze that data on the fly, enabling supply chain organizations to meet enterprise expectations for real-time decision making

3. Real-time decision making that triggers an expectation for real-time execution

To achieve this, supply chain leaders must overcome the challenges of legacy technology and lack of data, all while utilizing the right technology that enables, not overwhelms. This requires digital supply chain transformation to optimize critical operations with data assets such as artificial intelligence (AI), large language models (LLMs), augmented reality (AR)/virtual reality (VR) and more.

Supply chains are losing customers amid disruptions. Mounting backorders, low inventory, increased prices and delayed shipments plague supply chains and threaten customer loss. Meanwhile, CEOs increasingly expect supply chains to drive growth, while cutting costs.

Improving customer experience (CX) is a top 3 business priority. Supply chain performance plays a key role in whether a customer is likely to repurchase, and services and offerings should be designed around customer enablement. According to Gartner research, enabled customers are 2x as likely to repurchase, but only 23% of supply chains focus on enabling their customers. Many supply chains lack direct customer insight and focus instead on operational efficiency and on time, in full (OTIF), rather than reducing customer pain points.

To scale customer experiences across the global supply chain, focus supply chain management on these key actions:

• Drive future supply chain contribution to growth by gathering voice of the customer (VoC) data to inform customer personas and journey maps that focus on reducing customer and employee effort with targeted solutions.

• Streamline the supply chain service menu. The best supply chains offer their capabilities “as a service” and differentiate the customer experience order to order across the buying journey.

• Gain funding and address high service delivery costs with cost-to-serve transparency.

• Address the challenge that the pace of launching new services is too slow.

Technological advancements and regional disruptions continue to exacerbate talent scarcity and skill set shortage. Over the next three to five years, 63% of supply chain organizations expect the high competition for talent to continue. Only a minority anticipate an increase in available talent from historically less represented regions (such as Africa, the Middle East and Eastern Europe) and from AI deployments.

CSCOs preparing for the future of supply chain aren’t sitting idly by: They are investing in the employee experience and employee value proposition (EVP). But procedural and cultural challenges to work flexibility persist. To attract, retain and engage the talent that future supply chain strategy demands, CSCOs must offer an EVP that moves beyond financial motivation to provide a flexible, purposeful day-to-day employee experience where employees feel understood, autonomous, valued, invested and cared for — and are offered pathways for personal development and choice in work. The competitive advantage here comes from attracting and retaining not only the right skills but having more engaged employees helping your organization succeed.

The ambition and scope of sustainability legislation are changing the operating context for supply chains and changing expectations of them. Change is hard and can be overwhelming. Gartner’s 2024 Future of Supply Chain Survey finds that 67% of supply chain leaders point to the amount of new ESG regulations as among their top 5 most influential drivers in the next three to five years.

As legislative and stakeholder pressures increase, so does risk. Reinvention to achieve sustainability is critical to future-proof business operations and address global sustainability concerns.Sixty-seven percent of CSCOs are accountable for environmental and social sustainability KPIs. Communication and alignment may improve internal effectiveness and reputation, but supply chain transformation is how you truly realize sustainability and drive change in the end-to-end value chain.

As formerly voluntary activities such as greenhouse gas emissions reporting become legal requirements, leverage these requirements to overcome barriers to progress in three key ways:

• Recognize that the supply chain function is a key stakeholder, but not the only stakeholder. Use legislation to enhance cross-functional collaboration with other enterprise leaders.

• Anticipate the impact that legislation will have on the supply chain, and incorporate these legislative implications into strategic decision making.

• Leverage legislative requirements to overcome barriers to progress in sustainability, build capabilities to drive progress and intentionally capture knock-on benefits from implementation.