Companies are missing out enjoying a competitive advantage by not fully utilizing digital investment, ecosystems and customer-centric strategies, according to a new study from Accenture.
Based on a survey of 1,350 business executives, the report "From Inventory to Influence: The Mover Becomes the Shaker" reveals that more than three-quarters (78%) of executives and their companies — named the “Laggards”— are missing opportunities to leverage the power of the supply chain as a driver of revenue growth.
The remaining 22% of companies, referred to as “Leaders,” are making smart moves in three areas — digital investments, customer-centricity and ecosystems. This is enabling them to shift their supply chain strategy from driving cost efficiencies to powering growth opportunities and achieving competitive agility. According to the report, the Laggards need to quickly transform the supply chain and operations function into a collaborative engine of growth and innovation or else they risk their future success.
“We’ve discovered that a small set of companies have supply chain and operations executives who are using digital with a purpose and collaborating across the C-suite, and other business functions, to create and implement customer-centric strategies that enable growth,” said Don Shuman, senior managing director in Accenture’s Supply Chain and Operations group. “As a result, the supply chain and operations executives at these companies are taking a more influential role at the board table and adding a new unique perspective.”
While most supply chain and operations executives recognize the benefits of digital technologies, Accenture’s study shows that the Leaders actively infuse digital intelligence throughout their supply chains and operating models. Leaders scale digitally-enabled solutions in the supply chain at a rate almost equal to that of their product design and customer engagement functions and even surpass the digital investments made in their sales functions. And their efforts are paying off, with nearly two-thirds of Leaders (46%) meeting or exceeding the return on invested capital in digital over the past three years, compared to just 36% of Laggards.
The report notes that Leaders have a unique approach to customer centricity, i.e., putting customers at the center of everything. They recognize that each C-Suite member can benefit from the insights that are generated across the supply chain and operations and enable the entire company to become more customer-centric. That puts chief operating officers (COOs) and chief supply chain officers (CSCOs) in a unique position to help accelerate collaboration that leads to customer-fueled growth.
The majority of both Leaders (78%) and Laggards (64%) embrace the idea of becoming ecosystem orchestrators. However, Leaders look beyond traditional partners like suppliers and recognize that technology partners, universities, innovation incubators, start-ups and even competitors can help drive relevant new offerings to customers as quickly as possible. This is a game-changing realization not just for COOs and CSCOs, but also for their C-Suite counterparts, according to the report, offering an opportunity to transform what was previously known as a support function into a growth engine.
“The intense focus on digital, customer centricity and ecosystems has enabled the Leaders in our study to shift their supply chain strategy from chasing incremental cost savings to creating new value, as part of a zero-based-mindset, that fuels sustained growth,” said Kris Timmermans, senior managing director and Supply Chain, Operations & Sustainability Strategy lead at Accenture Strategy “Their investments and emphasis on these areas help them better understand high-value customers and meet their needs to accelerate competitiveness.”