Supply Chain Conferences

In 2020, many of the supply chains in Gartner’s Top 25 study were quite literally helping save the world and keeping society running during the darkest days of the pandemic. Now, the opportunity exists to build on this momentum to solve some of the world’s longer-term social and environmental challenges. A maturity differentiator among purpose-driven organizations is that those further along in the journey are not simply supporting a varied list of green initiatives and/or people-related programs. They have integrated these into a larger strategy by working alongside commercial partners. Some are including environmental, social and governance (ESG) brand messaging as an increasingly integral part of their product marketing budgets, instead of treating ESG investments as being purely an operational cost.

Leading purpose-driven organizations are not simply supporting a varied list of “green" initiatives and people-related programs; they have integrated these into a larger strategy alongside commercial partners, as both B2B and B2C customers increasingly demand higher sustainability and ethical standards from suppliers. Beyond the natural environment, many supply chain strategies have increased focus on diversity, equity and inclusion (DEI). Some have even linked employee bonus compensation to progress against DEI goals. Outside of internal workforces, many have also expanded supplier diversity programs. Finally, many corporate CEOs and, by proxy, heads of supply chain, are addressing social issues like racism in society and healthcare head on.

Prior to the COVID-19 pandemic, corporate supply chains faced a dynamic competitive landscape driven by more complex customer requirements and competition from both existing players and new market entrants. Along with intermittent supply disruptions and larger-than-normal demand swings, the pandemic has driven an accelerated level of business model transformation across industries, requiring supply chains to be highly adaptive. Many changes were driven by an outsized uptick in products and services delivered direct to customers (DTC) and patients, instead of through more traditional, centralized locations such as physical stores and medical facilities. At the same time, in B2B, as-a-service models and customer-composable solutions rose in prominence in industries such as high tech and industrial.

In 2020 many consumer product companies reduced portfolio SKU counts by a quarter to a third, trimming long-tails that had formed over several years of expansion. This addressed supply constraints and, in some cases, surging demand. Some companies added the ability to finish orders through their distribution network to keep pace with more volatile demand signals.

A survey of boards of directors, taken late in 2020, showed that nearly 70% of respondents accelerated their digital roadmaps, as compared to the beginning of the year (see Use Gartner’s Digital Business Maturity Model to Plan Your Digital Business Acceleration). A common feature underpinning this state is a shift toward common ERP platforms, processes and datasets that can be leveraged for insight and decision making. These new platforms typically come with improved cybersecurity, helping mitigate a major risk for most companies. Some leading supply chains have reached a point in their transformation journeys where they consider themselves “digital first” in the use of technology to enable more seamless CXs, and more automated and insightful decisions in supply and product management at scale. However, digital transformation wouldn’t be possible without the right talent.

Leading companies conduct formal skills assessments and strategic workforce planning. AI, ML and big data analysis are the most sought-after capabilities, and most are simultaneously recruiting and developing these skills in their organizations. Several advanced supply chain organizations run digital literacy and dexterity programs to enable employees to better understand and exploit digital business opportunities, and learn how to use data-driven analytics for more informed decision making in their roles.

Given the rapid pace of digital transformation, change management is a critical organizational skill set. Supply chain leaders position new digital technologies as a means for employees to stop spending time on manual, non-value-added activities, so they can focus on customer value.