Chief supply chain officers (CSCOs) of traditional organizations need to adapt their strategies to meet the challenges of digital giants and start-ups.
Gartner recommends that traditional CSCOs follow four key steps to remain competitive in the face of innovation from large disruptors such as Amazon and Alibaba, as well as from small, digitally savvy start-ups. Following is an overview of these four steps – becoming close to customers, instilling an innovation mindset, creating an agile supply chain, and aligning the operating model to new business models.
Become close to customers
According to Gartner, customer proximity and intimacy, or the ability to know which products and services customers really want, is critical for an organization’s success. However, this characteristic is one that many established companies risk losing over time, which opens a window for competitors.
To start getting closer to the customer again, Gartner advises CSCOs to gather voice of the customer (VoC) data and create customer journey maps to discover critical touchpoints.
Instill an innovation mindset
Customers want better, cooler and smarter products, and solutions and services with extended capabilities. Gartner advises customers also want a continuous flow of innovative products developed and launched without delays.
Results from a recent Gartner supply chain survey show that 44% of respondents are planning to adopt an agile product development methodology to become faster at launching new products. Many established organizations are now planning to operate much like a startup-like when it comes to innovation. To create the necessary innovation culture, Gartner says that CSCOs need to engage their employees with a strong sense of purpose and inspire them with shared beliefs to guide decision-making.
Create an agile supply chain
An agile supply chain organization makes use of self-forming teams and data-driven decision-making to become more responsive. By embracing less hierarchical organizing and leadership models, Gartner says that companies are able to engage more of their talent to develop new ideas across operations, products and customer service.
Align the operating model to new business models
Gartner advises that an advantage nontraditional competitors frequently have over established companies is that they don’t follow the established supply chain conventions. These new competitors, especially emerging startups, often solely focus on achieving innovation as their business goal, instead of having to achieving the performance metrics that management and markets expect from established companies.
“Many supply chain executives operate separate supply chain segments within their global networks to support emerging new products,” said Pierfrancesco Manenti, VP analyst with Gartner supply chain practice. “Those segments rely on third-party contract manufacturers and use different distribution channels than the traditional supply chain. This combination of conventional and innovative supply chain segments is a recipe for success for traditional organizations.”