Bridging the Gap: Realizing Intentions in Supply Chain Transformation

An abstract image of a connected world. Photo by Javier Miranda on Unsplash

Despite a consensus among manufacturers on the need to adapt to ongoing supply chain disruptions, a significant gap exists between intention and action.

From Consensus to Action: Navigating the Challenges of Supply Chain Transformation

The aftermath of COVID-19 continues to impact global commerce. Kearney consultancy, in collaboration with the World Economic Fund, surveyed 300 operations executives to understand how manufacturers are redesigning their supply chains to tackle these challenges. The report, “From Disruption to Opportunity: Strategies for Rewiring Global Value Chains,” identifies a strategic shift in five key areas. However, the survey also reveals a gap between strategic intent and operational delivery due to the scale and complexity of the necessary changes and opportunity costs.

Reality Undercuts Rhetoric

The survey highlights the reality undercutting rhetoric in each of the five trends:

  1. Only 28% of respondents expect to have nearly all “in-region, for-region” operations in place by 2030, indicating a slow move towards regionalizing production.
  2. Despite the push for digital transformation across end-to-end operations, only 1% have eliminated manual spreadsheets to date.
  3. In the effort to upskill the workforce to meet new supply chain requirements, only 23% believe they’ll have the requisite skills in place by 2030.
  4. Only 14% are redesigning their manufacturing networks to reduce Scope 3 emissions, despite the desire for innovative sustainability.
  5. Just 15% cite tangible actions taken to strengthen performance, resilience, and sustainability in the shift from cost to customer value as the chief driver of operations.

The Struggle for Balance

Despite these gaps, Kearney partner and report co-author Per Hong sees excellence among supply chain leaders as they struggle to balance cost, performance, resilience, and sustainability. However, cost remains a pivotal factor in deciding the location of plants and distribution centers. The desire for digital operations is widespread, with a focus on end-to-end supply chain visibility aided by artificial intelligence. Yet, managers continue to use Excel workarounds, indicating a struggle to eliminate manual processes.

The Need for New Skills

The need for automation and new technology brings with it a demand for human workers with a new set of skills. The top five skills coveted by organizations today include analytical thinking, creative thinking, resilience, flexibility and agility, motivation and self-awareness, and curiosity and lifelong learning. However, the reality on the ground is that many leaders face the reality of limited working capital, making it difficult to prioritize initiatives. The authors of the study urge patience as the progress of supply chain transformation is a steep and slow journey.