Three-quarters of firms miss supply chain growth opportunities

31 July 2019 3 min. read
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While companies look to find efficiency savings by leveraging digital solutions in their supply chain, close to 80% of firms are missing out on the true growth potential of such a move. According to new research, firms which are better able to shift supply chain strategy to powering growth opportunities are more likely to see a higher return on their investment in digital technology.

From a financial perspective, a business’ supply chain can have huge implications for financial flows, and hence, taxation. Supply chain consultants regularly team up with financial advisors to craft tax-efficient supply chains. These and more developments mean that the supply chain is increasingly emerging as a source of competitive advantage.

The importance of supply chain management is illustrated by the fact that with an estimated market size of around £1 billion, operations and supply chain consulting is the second largest segment within UK’s £10 billion management consulting industry, following the fast-growing digital & technology domain. For decades, operations consulting has focused on improving the operations of organisations through operational excellence, helping them become more effective, efficient, client-centric and agile.

Despite this, a new report from Accenture has found that a staggering 78% of executives and their companies are missing opportunities to leverage the power of the supply chain as a driver of revenue growth. According to a survey of 1,350 business executives, these so-called “laggards” are missing opportunities to leverage the power of the supply chain as a driver of revenue growth. The remaining 22% of companies are referred to as “leaders.” 

Three-quarters of firms miss supply chain growth opportunities

Failing to capitalise on this opportunity could prove a fatal error, according to Accenture’s study. While most supply chain and operations executives recognise the benefits of digital technologies, Accenture’s study found that leaders actively infused digital intelligence throughout their supply chains and operating models, something which gives them an edge when it comes to seeing a return on their investments in the process.

Leaders were found to 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. As a result, leaders in the market confirmed that while 21.6% of the time they had achieved their expected returns on digital investments over the last three years, a quarter had exceeded their plans.

At the same time, only 8.1% of laggards achieved their expected returns and even fewer excelled. 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. 

In order to do so, they will need to join the 22% of companies shifting their supply chain strategy from driving cost efficiencies to powering growth opportunities and achieving competitive agility through making digital investments, adopting a customer-centric mindset and developing their ecosystems. 

Commenting on the findings, Stéphane Crosnier, UKI lead for Supply Chain, Operations & Sustainability at Accenture Strategy, said, “The secret sauce to driving growth through the supply chain is by putting customers at the heart of everything. Leaders are achieving greater levels of collaboration across their extended ecosystems and leveraging innovative technologies to achieve this. From intelligent machines that enable advanced levels of customer segmentation to extensive use of AI powered collaboration platforms, Leaders aren’t afraid to shake up their enterprise to achieve better growth and competitive agility.”