The Future of Supply Chain: 2019 Edition

By November 29, 2019Beyond Supply Chain
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In celebration of the 2019 Future of Supply Chain report publishing, here’s a glimpse at the findings:

Supply chains are in the midst of an evolution that is reshaping not just how we organize and operate, but also how we define the profession. Technology is connecting and integrating firms, processes and functions across entire networks. New business models and players are emerging to fulfill customer needs faster and more comprehensively than ever before. The global trading system is under intense political pressure as protectionist forces exert their influence. Sustainability has pushed its way up the business agenda, causing companies to seriously pursue circular economy thinking and practices. These four big trends are among those shaping the future of supply chain in profound ways.

Digitalizing the Ecosystem

As technology continues to evolve, it’s moving away from single independent applications to comprehensive environments that will have the capability to connect and orchestrate across the ecosystem. The evolution of technology is by far the prevailing force reshaping supply chains (see Figure 1). The good news is that developing a roadmap is no longer the barrier. However, now it’s culture, legacy technology and data access/usability. The task ahead is determining which elements are fit for the future and which need to be changed.

Competing on Customer Experience

For years, the shifting needs of the customer has been top of mind for the supply chain professional. More choice, faster delivery and flexible service models have long been the mantra of the consumer/customer. What has changed, however, is the increasing ability of competitors to deliver on the extremes of these preferences (such as delivery anywhere and one-hour delivery). Nontraditional competitors are turning business models upside down, changing how talent is attracted and managed, how organizations are designed, and how technology is leveraged. They are changing how new products and services are launched and are reshaping customer expectations.

Figure 1: Most likely to Reshape How We Define, Organize and Operate Supply Chains

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Navigating Through Trade Uncertainty

2019 was a year where the shifting trade environment continuously thrust supply chain onto the front page. Although some still view this as a blip in time, these trade war flare-ups have caused changes that 50% of supply chain professionals say are permanent or very difficult to reverse. The lasting impact, however, shouldn’t just be the physical changes. While these scenarios introduce added complexity, they also hasten the ability to build more flexible and resilient networks that can respond effectively to global shocks.

Reshaping the Circular Economy

Another positive trend emerging from the chaos — and one that has the potential to change every aspect of supply chain — is the push for a circular economy. Whether it’s done because of an environmental conscience, to combat climate change or because the raw materials the supply chain needs are becoming scarce, an evolution to a circular economy is happening. The tipping point will come from consumer/customer pressure, government regulation, a consortium of the world’s most influential businesses, or more likely a combination of those.

The trend of the supply chain profession being responsible for solving these large-scale bigger business and socioeconomic problems has accelerated in recent years. Despite that, the percent of supply chain professionals who believe they are viewed by their CEO as equally important to business success as other functions has perplexingly been stuck at only 50% for five straight years. This is in contrast to the increasing number of supply chain professionals who are now reaching the CEO seat. Supply chain has earned a seat at the table, but the future imperative is getting an equal seat.

Michael Uskert,
Chief of Research,
Gartner Supply Chain
[email protected]

 

 

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