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Three Trends Shaping the Supply Chain of the Future

Oct. 21, 2020
A good supply chain was efficient and powerful in the past, but now it also has to be agile and fast. Here are three ways companies can achieve that goal.

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As companies around the world work to secure their supply chains and lay out their plans for the post-COVID business environment, many are reimagining the roles that technology, automation and resiliency will play in those critical networks. At its recent symposium, Gartner outlined three key trends that it thinks will play the largest roles in those supply chains: digital business, competitive/trade uncertainty and sustainability.

Right now, supply chains are in the middle of an evolution that will change completely how chief supply chain officers (CSCOs) organize and operate their organizations, Gartner says.

“CSCOs are tasked to design a supply chain organization that fits into this new era,” said Gartner’s Mike Burkett, in a press release. “While in the past, a good supply chain was efficient and powerful, it must now be agile and fast.”

Three Paths to Success

According to Gartner, many CSCOs struggle to create a holistic digital supply chain roadmap. At the same time, they are under pressure from CEOs who want to digitalize their organizations.

“Given the critical role of supply chain in ensuring customer satisfaction and experience, much of the digitalization efforts will be on the shoulders of the CSCO,” Burkett said. “This is the greatest transformation of supply chain structures in a long time, and it will not be easy.”

The top barriers to a digital supply chain today are corporate culture, the existence of legacy technology, a lack of usable data and too many legacy processes. “CSCOs must work with partners across the business to overcome those barriers,” Gartner advises, “and enable their CEO’s digital business ambitions.”

Managing Uncertainty

In recent years, uncertainty has been a constant in supply chain, including confusion over where the next competitor will come from and what impact it will have on the CSCO’s organization. This is a real concern for CSCOs, half of whom believe that their businesses are at risk of being disrupted in the coming years, with the greatest risk coming from nontraditional businesses such as startups, Gartner reports.

There is also much trade uncertainty being driven by events like the U.S.-China trade war and Brexit. More recently, the COVID-19 pandemic has raised concern about future pandemics, after shutting down global supply chains and trade routes. “The ongoing uncertainty calls for a new approach to supply chain management,” Burkett said. “CSCOs must build more flexible and resilient networks that can respond effectively to global shocks and disruptions – be it caused by nature or a competitor.”

Driving Better Sustainability

Supply chain professionals are also focused on sustainability, as well as on the impact that their organizations and operations have on the environment. An economic model that separates the ability to achieve economic growth from the consumption of natural resources, the circular economy is gaining more attention right now.

“Supply chain plays a critical role in every part of the cycle: make, use, return, recycle, reuse,” Gartner points out, noting that one of its recent surveys found that 28% of organizations had already implemented circular design approaches in their innovation strategy—and 39% planned to do so within the next two years.

“A supply chain that enables the circular economy has to have strong reverse logistics capabilities,” Burkett said. “The heavy equipment and machinery industries are already on a good path. However, this is a trend that no industry can miss out on—including consumer products.”

About the Author

Bridget McCrea | Contributing Writer | Supply Chain Connect

Bridget McCrea is a freelance writer who covers business and technology for various publications.

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