To ensure future success and achieve a competitive advantage, chief supply chain officers (CSCOs) must prepare offset strategies for five key challenges brought about by accelerating change.
At the 2022 Gartner Supply Chain Symposium/Xpo, Ken Chadwick, vice president analyst with the Gartner Supply Chain practice identified the five focus areas as cognitive overload, customer experience, energy instability, technology change and supply chain cyber risk.
“Offset strategies are a proven way to shift the competitive landscape by applying unconventional or untried approaches to leverage individual strengths,” said Chadwick. “If the offset strategy focuses on the most critical matters of our time, supply chain leaders can reap immediate rewards.”
The five important challenges when designing an offset strategy include:
Cognitive overload
The pandemic, its resulting supply chain disruptions, and the shift to remote and hybrid work models increased the complexity of work and changed collaboration and decision-making which made many employees feel overwhelmed. Instead of adding more complexity to the situation, supply chain leaders should aim to simplify how work is done.
“We’ve seen great successes with constrained decision-making. This model deliberately reduces the number of people involved in a decision and the time people must gather information and make the decision. CSCOs can also outsource some decision-making to artificial intelligence,” Chadwick added.
Customer expectations
To offset rapidly evolving customer needs, supply chain leaders must shift from a “Just in Time” mindset that primarily focuses on internal cost and efficiency goals, to a “Just the Customer” mindset, focusing externally on customer needs.
This shift will provide supply chains with the opportunity to reposition their commercial contribution to the business to one that delivers both optimization and drives business growth.
Energy instability
Disruptive events, such as the Texas ice storm in 2021, showed that relying on a singular supply of energy can cause failure. Humanities’ need to consume energy is also having an impact on the environment.
One way for CSCOs to address this challenge is to enable distributed, sustainable energy management, where the power demand of factories, fleets and other parts of the value chain is supplied by a distributed network consisting of renewables, microgrids and battery storage.
Technology change
Gartner's research concludes that the biggest challenge facing supply chain leaders in the technology space is not necessarily the technology itself. It is embracing and adapting to new technologies and envisioning new ways of doing business. That’s why CSCOs must be at the forefront of change and inspire their employees to use and trust the next generation of technology.
Supply chain cyber risk
Gartner research has found that over 80% of companies experienced a significant cyber security incident in the last two years. This development is driven by connected technology networks and cyber-physical systems, such as sensors and smart vehicles.
Supply chain leaders can react to this evolving risk by partnering with the chief information security officer to build a cyber security framework.
“CSCOs cannot control if, or when, they get hit by a cyber-attack. What they can control are their own decisions on investments and actions. Supply chain leaders must realise that cybersecurity is not just an IT issue. It includes making decisions on partners, conducting realistic risk assessments, and integrating a cybersecurity perspective into everything they do,” Chadwick concluded.
