CSCOs missing opportunity to digitally reinvent supply chain, says Accenture

Many chief supply chain officers (CSCOs) are not leveraging their C-suite counterparts to help reinvent the supply chain function and transform it into an engine of new growth models and customer experiences, according to new research from Accenture.

The research report, Drive Your Own Disruption: Is your supply chain in sleep mode?, reveals that the 900 supply chain executives surveyed were more likely to say that they see their function in two years as a cost efficiency driver (60%) or a support function (68%) than as a competitive differentiator (48%) or a growth enabler (53%).

It means that many CSCOs could be leaving significant value on the table for their organisations.  

“Supply chain executives should take no comfort in being categorised as a support function,” said Mohammed (Mo) Hajibashi, a managing director at Accenture and global Supply Chain lead in its Products industry practice.

“In this digital era where customers demand speed to market and hyper-personalisation, these executives need to ensure that their supply chain function is not only a key differentiator but also ensures the sustained growth of their organisations.

“The fast and efficient adoption of the right new technologies that enable a new way of working, along with increased C-suite engagement with the supply chain function, are the keys to achieving growth via new digital business models that create new customer experiences, craved by the consumer.”

Accenture research found that 80% of the supply chain executives surveyed identify the chief information officer or chief technology officer – not the CEO, chief operating officer (COO) or chief financial officer (CFO) – as key stakeholders, even despite the major role the CFO has in making technology investment decisions and the COO’s role in designing the operating model.

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Furthermore, in many organisations, the supply chain isn’t seen as a driver of differentiation and aggressive growth.

Meanwhile, the CSCOs blame the absence of a clear business strategy (cited by 43% of CSCOs surveyed), together with an inadequately skilled workforce (48%) and incompatible legacy systems (44%), for their function’s inability to drive value for the organisation.

According to the report, CSCOs have an opportunity to work with the full C-suite to overcome three core challenges – leadership, labour and legacy technology – and move their function toward better and more strategic partnerships that will provide the organisation with increased value-driving potential.

It highlighted the following areas for CSCOs to concentrate on:

Leadership - the CSCO will need to be better aligned with business strategy and build a new and productive working relationship with the executives responsible for long-term digital investment: the CFO and COO.

Labour - CSCOs need to build a workforce that focuses on core supply chain workers, “adaptive” (part-time and on-demand) workers and artificial intelligence / robotics — all working together to drive productivity at speed. The CSCO will also need to leverage their C-suite connections to secure support for a reskilling strategy founded on continuous learning.

Legacy Technology - digitally decoupling legacy systems provides a less-resource-intensive and more impactful way to drive agility than spending on new, more compatible systems. CSCOs can start by decoupling data from their legacy IT systems, replicating it and moving it, in real time, to cloud-based data “lakes” that are accessible to customers.