The era of the supply chain ecosystem is upon us.
As of 2021, 68% of supply chain executives report that they have been constantly responding to high-impact disruptions over the last three years — and most of them did not have time to recover before the next disruptive event hit them. To navigate this environment, many supply chain leaders are looking to create or participate in a partner ecosystem over the next few years, making this move one of the top predictions for supply chain strategy.
In 2022 and beyond, chief supply chain officers (CSCOs) must update their vision to account for ongoing and unimagined disruption to global networks, operating models, and stakeholder demands. Some of these disruptions are externally driven — such as material shortages, climate-driven disruption or labor scarcity. Others are driven by the organization’s own digital transformation plans.
The Gartner 2022 strategic supply chain predictions reflect the ways that supply chains must address current and emerging challenges and close the say/do gap for areas of growing stakeholder concern, such as sustainability and diversity, equity and inclusion (DEI). CSCOs can use these predictions to shape their supply chain vision for the next two to five years.
Strategic supply chain prediction No. 1: Ecosystems will become the predominant competitive entity
By 2026, more than 50% of large organizations will compete as collaborative digital ecosystems rather than discrete firms — sharing inputs, assets and innovations.
The ecosystem has the potential to become the competitive entity of the future, as it can effectively leverage the capabilities of all its members. For example, the ability to share data or information on risks sensed by individual partners enables the entire ecosystem to respond to inputs that would otherwise be missed. This creates a more transparent supply chain that provides the opportunity to connect upstream supplier capacities with a deeper understanding of customer demand. Ecosystems that share end-to-end supply chain information in real-time will be able to provide a better and faster response to unexpected changes in supply or demand.
Strategic supply chain prediction No. 2: Sustainable packaging: Good intentions, missed commitments
By 2025, 90% of public sustainable packaging commitments won’t be met due to reliance on plastics and single-use packaging.
Enterprise commitments to sustainable packaging have centered on 100% of packaging being reusable, recyclable or compostable by 2025. However, most organizations will fail to meet these commitments, as sustainable packaging is still a niche product, and the recycling infrastructure and aftermarket are far from mature. To keep up with legislation and consumer demands, supply chain leaders must work to incentivize consumers to embrace sustainable packaging and focus on waste reduction by making sustainable packaging part of the product design process. Ecosystems are also key to success here, as organizations can come together at a pre-competitive stage to establish standards and jointly fund innovative recycling methods and packaging solutions.
Strategic supply chain prediction No. 3: Modularity for the win
By 2024, supply chains redesigned for modularity will operationalize business model innovations in half the time of competitors.
Moving forward, competitive advantage will fall to whoever has the ability to make operating model changes easier, faster, safer and less costly. Modular operating models help create composability by breaking supply chain resources and processes into “LEGO blocks” of capabilities that can be quickly reused and reconfigured. A composable supply chain shortens the time to create or capitalize on an emerging opportunity and allows for quick reactions that can minimize the impact of an emerging threat or disruption.
Strategic supply chain prediction No. 4: Metrics for DEI
By 2024, 70% of global organizations will report metrics to track the degree to which the supply chain is delivering against corporate diversity, equity and inclusion objectives.
Preliminary data from Gartner’s 2021 Future of Supply Chain Survey shows that between 50% and 60% of supply chain leaders are sensitive to how a lack of DEI efforts can affect performance. They believe that over the next three to five years customers will intentionally shift their business to companies that visibly demonstrate their DEI activities and outcomes — even when it costs more. That’s why supply chain leaders must define a set of metrics that allows the executive team to track high-level DEI performance and progress against expected outcomes, such as an increase in underrepresented talent or pay equity. It's not only customers that will use DEI to make choices. At this time of talent shortages, employees are being selective about where they work and choosing companies where they can be part of more diverse and inclusive teams, with equal pay and opportunity.
Strategic supply chain prediction No. 5: The artificial advisor
By 2026, more than 50% of supply chain organizations will use machine learning (ML) to augment decision-making capability.
ML will augment decision-making in the majority of supply chain organizations within the next five years. Decision-making in the supply chain will progressively move from a “form of art” — where decisions are based on gut feeling and experience — to a fact-based capability enhanced by artificial intelligence. The majority of CSCOs believe that for activities such as decision making (82%), scenario planning and modeling (78%), and market intelligence and forecasting (74%), augmentation is the way forward.
The original article by Simon Bailey, Gartner's senior director analyst, is here.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Image credit: iStockphoto/Artem_Egorov; chart: Gartner