Insights / Supply Chain / Article

4 Initiatives That Will Give Your Supply Chain a Competitive Advantage

February 23, 2023

Contributor: Jordan Turner

Reinventing your approach to customers, sustainability, analytics and work design will propel it forward.

What do high-performing supply chain organizations do differently? According to Gartner research, they are strategic advisors to their C-suite and are reinventing their approach to customer enablement, sustainability, real-time execution and human-centric work design.

In fact, over the coming five years, 80% to 90% of supply chains plan to rethink these four areas of operations — but the high-performing ones have already started. This year and going forward, it’s mission critical to adopt new practices to pull ahead of the competition and become a supply chain of the future.

Download now: Your Future of Supply Chain 2023 Roadmap

What’s ahead for supply chain

“Using high-performing supply chains as a guide, you can capture a five-year competitive advantage with these four initiatives,” says Jennifer Loveland, Senior Director Analyst at Gartner.

No. 1: Supply chain will move beyond customer satisfaction to customer enablement

Customers enabled by the supply chain to get their own jobs done are twice as willing to repurchase as customers who were merely satisfied. Yet, only 23% of supply chain organizations focus on enabling customers.

There’s an immense opportunity to create competitive advantage by moving beyond customer satisfaction and toward customer enablement. This means providing a customer experience that is reliable and simple and enables customers to get their jobs done better. For example, along with its reliable and easy-to-use experience, Amazon enables shoppers by offering a service to order products that are gift wrapped upon delivery. Predelivery gift wrap services, especially during the holidays, enable customers to get their gift wrapping done with no effort at home. 

“To achieve customer enablement, you must prioritize it and ensure there is no one-size-fits-all across the supply chain and no one-size-fits-every interaction for a specific customer,” says Loveland.

No. 2: Supply chain will embed sustainability in operations

Engaging in circular economy activities is important to 75% of supply chain leaders. Yet, in support of achieving sustainability outcomes, only 19% believe they have sufficient capabilities.

Reinventing to achieve sustainability outcomes is now critical to future-proof business operations. Though many organizations have seen soft benefits of sustainability, such as improved reputation, far fewer have seen more concrete business benefits. It’s time to move from talk to action. 

According to Gartner research, high-performing organizations pivoted from profit-driven to purpose-driven across the entire organization spanning awareness activities (such as strategy, vision, goals and objectives) to alignment on roles and decision making (such as org structure, metrics, data and product development).

It’s clear that to achieve sustainability outcomes, all organizations must acquire more funding, embed sustainability in operations, and coordinate change across the end-to-end value chain to address the circular economy and Scope 3 GHG emissions of suppliers.

Listen now: How High-Performing Supply Chains Stand Out

No. 3: Supply chain will move beyond real-time analytics to real-time execution

Closing the gap between the time spent making a decision and then executing that decision is a focus for 96% of supply chain leaders. Yet, on average, only 7% have real-time decision execution.

Nearly all supply chain organizations must react quickly to changing conditions, which requires automated decision making. Yet without real-time execution on those decisions, the supply chain will know exactly what to do but will react too slowly.

In the short and long term, real-time decision making still creates a competitive advantage given relatively low levels of adoption and challenges many organizations have with legacy technology. In three to five years, only about half of high-performing supply chains will have comprehensive real-time decision execution.

No. 4: Supply chain will implement human-centric work design

Labor shortages are a top challenge for 60% of supply chain organizations, and the workforce is the top priority for board directors in 2023. Yet, one-third of supply chain organizations lack an effective employee value proposition (EVP) to attract, retain and engage the needed talent based on human-centric work design.

The retention challenge is real, and it’s hitting business results — more than half (54%) of all supply chain organizations report that an inability to access talent has interrupted or curtailed business activities in their organizations during the past 12 months. 

To deliver an EVP that connects with employees, chief supply chain officers (CSCOs) must partner with CHROs to create a culture and employee experience that is flexible, purposeful and fulfilling. Employees want to be understood, autonomous, valued and cared for. At Gartner, we call this the Human Deal. 

According to Gartner research, when organizations make progress on any part of the Human Deal, they see clear benefits. The competitive advantage here comes from attracting and retaining not only the right skills but having more engaged employees helping your organization succeed.

In short:

  • Every year, Gartner conducts a Future of Supply Chain survey.

  • In this year’s survey, we analyzed the highest-performing supply chains to understand what they do differently and how they succeed to help inform where supply chains should focus over the next three to five  years.

  • Four reinventions are critically important to focus on now to become the supply chain of the future: customer enablement, sustainability, real-time execution and human-centric work.

Jennifer Loveland is a Senior Director Analyst at Gartner. She advises CSCOs and supply chain leaders on formulating an effective strategy and designing a supply chain to achieve that strategy. Her research seeks to create methodologies to standardize and break down theoretical concepts, such as segmentation or agility to move from "buzz" to value. She is a thought leader on how to build a more modular and composable supply chain and enterprise operating model to thrive during persistent disruption and digital business transformation.

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