Reinventing the supply chain

The supply chain is a retailer’s secret weapon. A digitally enabled, agile supply chain can help companies give the customer what they want – anywhere, anytime, and with the personalisation they now demand.

Technologies such as machine learning, data analytics, advanced AI, cloud computing, IOT, blockchain and robotics can cut the complexity that plagues retail supply chains, accelerate their responsiveness, and speed up time to market – creating not only efficiency but true growth value for the company and differentiating it from the competition.

But while most companies recognize the value of this kind of supply chain, few in the retail sector are making the most of the opportunity. Recent research by Accenture  found that while c-level supply chain leaders expect the function will be a driver of better customer service by 2020, a significant proportion also see it simply as a support function (68%) or a cost efficiency driver (60%).

Additionally, just 48% of these respondents predict that in two years’ time the supply chain would help differentiate their organization from its competitors, and only 53% expect it to enable growth.

These findings highlight a clear opportunity for the supply chain operations function. It has the capability to become a driver of sustained growth and to deliver the new customer experiences that are crucial for success in the digital era. However, work needs to be done to understand its potential among C-level executives.

No more missed opportunities: leadership, labour, and legacy

Driving that new value requires three things: alignment among the C-level business decision makers, a skilled workforce, and the right process, organisation structure and technology.

Go right to the top

Many chief supply chain officers are not working with the right people in the C-suite which is leaving them on the periphery of strategic decision-making.

Not to mention, 80% think they should forge their closest relationships with the chief information officer or chief technology officer, but in many cases, it is the chief financial officer and CEO who makes the major strategic investment decisions and the chief operating officer who designs the operating model. This is a missed opportunity to build truly productive working relationships that position the operations function at the heart of the organisation.

Update the workforce

Better connections with these crucial members of the C-suite will have another important outcome for the supply chain: the support necessary to build the workforce the function needs to drive growth.

That means a powerful combination of core supply chain workers and adaptive (part-time and on-demand) workers, alongside the artificial intelligence and robotics that can inject new productivity and speed.

A good working relationship with the C-suite will also allow supply chain executives to make the right investments, establish the right operating model, and tap into support and resources for reskilling the existing workforce. Through continuous learning, these employees will learn to work effectively with intelligent technologies and in collaboration with new partners as part of a broad ecosystem.

Invest in responsiveness and agility 

In retail, data is now king. Without a sophisticated data strategy and effective data analysis, retailers will struggle to understand their consumers and give them the personalisation they demand. Their competitors will seize that opportunity instead.

That sort of capability requires investment – particularly in areas of the business that are held back by outdated systems. But that doesn’t mean simply throwing resources at expensive new systems that are more compatible.

Instead, retail supply chain executives can see the greatest impact by investing in the capabilities to get a deep understanding of micro-segmented consumer and market trends by using data insights and analytics; enable responsive and flexible fulfillment options in order to ship anywhere; and service in a differentiated and more personal way through customer service, pricing and personalization.

Retail supply chains will also benefit from focusing on solutions that encourage automation, improve the visibility of inventory, increase collaboration with manufacturers, and optimize flow of inventory across a number of channels.

Technology investments have the greatest impact when they show up the specific areas that will improve profitability. For retail, predictive analytics is one example. It can offer insight into point-of-sale information so that retailers know where the consumer is and what they are expected to buy. But unless big data analytics is consistently deployed across all supply chain areas, those valuable insights cannot be exploited fully – and companies will miss out.

Elevate the supply chain, power profitable growth

A reinvented supply chain for the retail sector will be adaptive and constantly learning, and it will embrace constant technological change and know how to profit from it.

Crucially, it will be plugged into the rest of the organisation and rise to become a key component of overall business strategy through the close engagement of the chief supply chain officer with the C-suite. That close engagement will position the function to transform further its relationship with the C-suite driving a higher profile and greater investment in its workforce and technology.

With data-driven strategy, cutting-edge technology, and a switched-on and agile workforce – all reinforced by a supportive C-suite, the retail supply chain can help companies give today’s customer what they demand. This is the supply chain that will power new growth.