Over the past two months, I’ve had the privilege of joining briefing calls with nearly two dozen supply chain organizations as part of the Supply Chain Top 25 analyst education process. Having run this research program for several years, I’ve found no better way to quickly immerse oneself in the latest and greatest challenges, innovations and trends of the most advanced supply chains in the world.
What are the common threads running through these companies’ updates? There are too many to cover here, so I will focus on the ever-popular intersection between technology and people. At the highest level, the solutions shared were intelligent, connected and integrated across functions and partners. The people, coming out of the most disruptive period of our careers, were upskilled, empowered and frankly exhausted.
One place to start in trend spotting is to follow the money and compare investment strategies between those making the global Supply Chain Top 25 and Masters list with those ranked lower on the broader list of companies evaluated. The Top 25 program team is still compiling summary statistics for this year, but a 2022 comparison shows some key differences in technology investments.
For more established capabilities, the top group invested significantly more often in sourcing and procurement, manufacturing execution and global trade management solutions. This is not surprising given the level of supply disruptions and constraints everyone faced during the pandemic. What’s unique is that the leaders had greater wherewithal to continue upgrading their product supply and risk management capabilities even amid the worst of the fire fighting.
A comparison of the relative investment frequency for emerging technologies shows double-digit percentage differences between Supply Chain Top 25 companies and others in the areas of immersive technologies (AR, VR), blockchain, conversational systems and artifical intelligence (AI). Most advanced supply chains have built the proper process, solution and data foundations required to start experimenting with, and harvesting value from, these new technologies.
Connected Solutions and People
The term “connected” spanned many of this year’s Supply Chain Top 25 company briefings and it was used in several contexts: connected customers, connected suppliers and partners and connected employees.
- Connected customers. In B2C, the most advanced consumer products companies have developed “ground truth” in terms of on-shelf availability with retailers through inbound traceability, machine vision, sell-through data and predictive algorithms. In B2B, there is similar tracking of inventory replenishment and consumption with customers. These capabilities allow for more synchronized daily operations and planning. On a more strategic level, all these companies had teams embedded with customers for joint innovation and problem solving.
- Connected suppliers and partners. Upstream, many of these same supply chains had similar connectivity and integrated planning with their strategic suppliers. In some cases, the forecasting ability of the brand owner was greater than their suppliers and they used collaborative planning tools to recommend supply commits based on projected availability calculations. Many of these leaders also enhanced their ability to proactively identify, mitigate and manage supplier risks.
- A leading life sciences company created an AI tool that models its end-to-end supply chain. It predicts previously unforeseen supply issues as an early warning and proposes best-possible solutions based on analysis of successful resolution of similar problems in the past. Likewise, a CP leader wove together functional control towers across its entire supply chain to create an ultimate control tower with predictive management and issue resolution. Several companies shared how they are using technology to promote greater sustainability and ethical sourcing through improved visibility and control.
- Connected employees. The leaders briefing us described various technology solutions that allow employees to maintain awareness of their environments through alerts and performance management, to boost productivity through physical and logical automation and drive innovation and collaboration with others through connected platforms. Many of them consider the machines working alongside and in support of human workers to be an extension of their workforce. Significant investments have been made in automating and instrumenting sensors on factory and warehouse floors over the past few years. Several highlighted the use of automation, digitalization and analytics to drive higher efficiency and product quality in these environments.
- Many supply chain leaders spoke more broadly about their employee engagement and talent development strategies. This was often in the context of increasing employees’ flexibility on where and when they work. Leaders continued to invest in skill development across the frontline, middle and executive levels of their organizations. One company trained its entire supply chain executive team on digital technologies through a dedicated university program.
- It’s important to note that, while these company-analyst briefings typically highlight the best facets of supply chains’ work, all is not perfect in even the most leading companies. Many leaders acknowledged employee fatigue and burnout. In more private discussions, some have noted uneven adoption of new tools, particularly new AI-based planning tools. There is an opportunity for us to digest and integrate the accelerated changes wrought by the last few years.
For those interested in learning more lessons from the leaders on the Supply Chain Top 25 for 2023, be sure to attend the dedicated sessions held at Gartner’s Supply Chain Symposia in Orlando in May and Barcelona in June. The ever-popular reveal of this year’s list will be done via online webinar on May 24, 2023.
VP Distinguished Advisor
Gartner Supply Chain