In the aftermath of the largest supply chain disruption in history, Supply Chain leaders are guiding their operations back to “normalcy”. A recent survey by Creo Advisors of Supply Chain and Operations executives (N=130) reveals insights on their current and future supply chain priorities and challenges.
The disruption referred to is the global supply chain crisis that has been ongoing since the onset of the COVID-19 pandemic. This crisis has been characterized by shortages of key goods, increased prices, and bare shelves. The disruptions have been so severe that they could knock 4% to 5% off industrial production in the next year or two.
Prioritization and Incentive Alignment
The survey asked leaders to assess importance versus performance across 10 key areas. Leaders indicated prioritizing the customer, cost management, and building a leading team among the most important.
Leaders responded that they were most effective in areas they found to be most important, but least effective in reducing complexity, enabling champions, and in digital transformation. Only 10% responded that tracking service metrics is a top priority, indicating a potential gap in customer service performance measurement.
Organizational Alignment
Interestingly, organizational alignment was rated least important. Organizational alignment, often overlooked, is a key pillar for growth. Less than 40% of leaders responded that their teams were very aligned. This percentage falls when considering alignment between the supply chain teams and the overall organization. Traditional incentive structures often fail to account for the whole system and the tradeoffs between functions, leading to alignment issues.
Technology and Implementation
Businesses have been navigating the implementation of advanced supply chain technologies through recent heavy investment. Despite this, respondents suggest the return has been relatively muted, with a roughly 70% satisfaction rate on these investments.
Over 80% of respondents reported having ERP system upgrades either ongoing or planned in the near future. However, training and enabling employees to adopt new technologies has been a top problem. About 45% of Supply Chain leaders either do not currently have advanced tools in place, or their planning team is unable to fully leverage their advanced tools, resulting in Excel being used as the default.
Looking Ahead:
The survey unveiled that the next wave of supply chain technology, including Artificial Intelligence (AI) and Machine Learning (ML), is imminent. While 25% of respondents have implemented AI and ML, 45% have projects underway.
The human element remains crucial, with problem-solving, adaptability, and digital literacy identified as top qualities for hiring managers. Creo Advisors emphasized the need for leaders to focus on people, capabilities, and processes to harness the full potential of next-generation technologies.
Conclusion:
As supply chains evolve into data-intensive and complex systems, next-generation leaders must align on key aspects like prioritization, technology adoption, and organizational alignment. Creo Advisors, a value creation advisory firm, encourages leaders to view Supply Chain and Operations Planning (S&OP) efforts as opportunities to address misalignment. By focusing on pain points and trade-offs, leaders can improve overall performance and sustain results through continued education and training.
