A recent Bain & Co. survey reveals a paradigm shift in supply chain management, with resilience and flexibility becoming the new focal points for executives, overshadowing the traditional priority of cost reduction.
In the face of ongoing global supply chain disruptions, a Bain & Co. report, released on February 21, emphasizes a significant shift in executive mindset. The report, titled “How CEOs Can Balance the New Supply Chain Equation,” suggests that cost savings have taken a backseat to the need for resilient and flexible supply chains. Authored by Hernan Saenz, Tracy Parker, Adam Borchert, and Joshua Hinkel, the report indicates that quality of product or service is no longer the sole determinant of supply chain success.
Adapting to Business Landscape Shifts
The Bain report highlights how business leaders are adapting to the new supply chain challenges, including labor shortages, the push for sustainability, changing customer expectations, and the advent of transformative technologies like AI. The consensus among executives is that supply chain turbulence will persist, necessitating a proactive approach to managing supply and demand fluctuations.
Onshoring and Near-Shoring Trends
Data from a September 2022 survey of 300 executives, now public, shows a trend towards onshoring or near-shoring supply chains between 2023 and 2025, with a move away from reliance on China. This shift is attributed to geopolitical instability and the need for faster, more reliable product delivery with reduced carbon emissions.
Leveraging Data and AI for Supply Chain Excellence
The report advises that harnessing supply chain data with advanced software and AI can lead to significant advantages. These include improved risk management, better adaptation to customer needs, smarter supply chain investment decisions, and enhanced sustainability tracking.
Capitalizing on Supply Chain Opportunities
Companies that navigate supply chain trade-offs effectively are poised to achieve strategic outperformance and set new benchmarks in operational excellence. The report suggests that the current environment presents an opportunity for industry leaders to reinforce their positions and for others to potentially leapfrog ahead in the competitive landscape.
