Unless your head has been buried in the sand ─ which I’d completely understand ─ you’ll be aware that the COVID-19 pandemic has disrupted, and in some cases, shattered global supply chain networks. It has been both a blessing and a curse to industry-seasoned professionals, as it has laid bare the structural and organisation inefficiencies and weaknesses eroding the core of many organisations. Fortunately, though, it presented chief supply chain officers (CSCOs) with an opportunity to reinvigorate and revitalise stagnating supply chain norms, and a chance to align their actions with three important CEO concerns, going forwards.
During the recent Virtual Gartner Supply Chain Symposium/Xpo, EMEA, the research firms analysts discussed how CSCOs could address the concerns of CEOs in a new, COVID-19-transformed world.
“When we conducted the annual Gartner CEO and Senior Business Executive Survey in the fourth quarter of 2019, many CEOs anticipated an economic downturn for 2020, and that was without the knowledge that a global pandemic was on the way,” said Thomas O’Connor, senior director analyst with the Gartner Supply Chain Practice.
“Those CEOs were already planning for reduced hiring, an emphasis on cost optimisation, but also an increase in digitisation efforts. And this is exactly what happened, though for a very different reason,” he added.
The Three Concerns:
The Challenges of a Changing Global Ecosystem
“With increased uncertainty around tariffs and trade regulations, CEO’s were already planning to redevelop their supply chains due to the impact of new international tariffs and trade controls. And now, given the pandemic, 21% of supply chain leaders believe their supply chain is highly resilient (according to a Gartner survey of 260 supply chain leaders in February 2020), with 55% expecting to be highly resilient within 2-3 years. CSCOs should prepare to present their plans to the C-Suite.
“Resiliency can always be improved, but there [are] trade-offs. More resiliency often means a supply chain organisation that is less lean, less agile and holds more inventory,” Mr O’Connor added. “CSCOs must explain that a supply chain needs to be resilient, but also work economically. Balance is key.”
“Despite 2020 being a cash-sensitive year, 39% of manufacturing businesses indicated that they had increased their technology investment beyond pre-COVID budgeted levels. CSCOs must make sure that any investment they are proposing aligns with their CEO’s critical priorities – growth, financial stability, cost management and risk management.
“CSCOs must make clear that today’s digital progress secures the options of tomorrow,” Mr O’Connor said. “For example, supply chain organisations with the right digital capabilities can act as the central nervous system of the business that senses risks and opportunities and enables real-time action.”
Structural Shifts in the Workforce
“Despite the majority of organisations implementing a hiring freeze during the pandemic, most CEOs recognise that the structure of their workforce needs to change. While this concerns all parts of the business, it’s the responsibility of the CSCOs to make sure that their organisation design is appropriate for an increasingly digitalised world, while properly upskilling supply chain staff and ensuring new talent is motivated by the prospect of a robust career path.
“Training employees, according to a clearly defined vision, is critical to gain buy-in from leadership and staff alike. CSCOs can perform a gap analysis to understand where the organisation lacks key skills and develop a strategy for either hiring those skills or upskill the existing work population,” Mr O’Connor concluded.”