Chief supply chain officers (CSCOs) need to adapt capabilities of nontraditional competitors to be able to address the challenges posed by modern supply chain disruptors.
Gartner recommends focusing on four critical capabilities to compete against digital giants, such as Amazon and Alibaba, as well as startups, that are reshaping industries through disruptive innovation.
Here are ways in how CSCOs can transform their traditional supply chains.
Become Close to Customers
Gartner says that customer proximity and intimacy – the ability to know which products and services customers really want – is critical for an organisation’s success. However, this characteristic is one that many established companies risk losing over time, which opens a window for competitors. As companies are lulled into complacency by long-established strategies in supply chain, sales, marketing and product development gaps arise in product and service offerings.
To start getting closer to the customer again, Gartner recommends that CSCOs gather voice of the customer (VoC) data and create customer journey maps to discover critical touchpoints.
Instill an Innovation Mindset
Customers want better, cooler and smarter products, and solutions and services with extended capabilities. They also want a continuous flow of innovative products developed and launched without delays.
Results from a Gartner survey show that 44% of respondents are planning to adopt an agile product development methodology to become faster at launching new products.
“Established organizations are now planning to operate much like a startup-like when it comes to innovation,” said Pierfranceso Manenti, vice president analyst with the Gartner Supply Chain Practice.
Manenti said that to create the necessary innovation culture, CSCOs need to engage their employees with a strong sense of purpose and inspire them with shared beliefs to guide decision making.
Create an Agile Supply Chain
An agile supply chain management organisation makes use of self-forming teams and data-driven decision-making to become more responsive. Gartner says that by embracing less hierarchical organising and leadership models, companies are able to engage more of their talent to develop new ideas across operations, products and customer service.
Align the Operating Model to New Business Models
According to Gartner, an advantage that nontraditional competitors frequently have over established companies is that they don’t follow the established supply chain conventions. These new competitors — especially emerging startups — often solely focus on achieving innovation as their business goal, instead of having to achieving the performance metrics that management and markets expect from established companies.
“Many supply chain executives operate separate supply chain segments within their global networks to support emerging new products,” Manenti said.
He continued that those segments rely on third-party contract manufacturers and use different distribution channels than the traditional supply chain.
“This combination of conventional and innovative supply chain segments is a recipe for success for traditional organizations,” he concluded.