Ernst & Young LLP has officially published results from its latest study, where it highlights growing C-suite complacency on supply chain issues. Named as EY 2024 Supply Chain Survey: Bridging the C-suite disconnect, the study took into account the word of 347 US supply chain leaders, hailing from various industries and whose companies have at least $500m in annual revenue, Markedly enough, the whole exercise would reveal how, despite a heightened awareness of supply chain’s importance, 78% of supply chain leaders say their organization is back to focusing on supply chain cost management in post-pandemic eta, with 28% citing cost reduction as one of the top three priorities currently. This marks a major shift from pandemic-era strategies. More on the same would reveal that, even though 88% of supply chain executives report that their organization’s supply chain plays a vital role in enhancing the customer experience by promptly addressing and meeting customer needs, more than 88% execs view the supply chain function as a cost center. This brings to the fore one of multiple gaps in perception uncovered by the study. Having said so, both sets of leaders identified modernization efforts as one of the top priorities for the future of supply chain.
Coming back to the gaps, another one which appeared during the EY study stemmed from 39% supply chain executives anticipating that their organization’s supply chain will be mostly autonomous by 2030, whereas on the other hand, 25% C-suite leaders claimed that it will take an additional 10 years. Moving on, nearly a quarter (26%) of the C-suite personnel were found to believe that their organization’s digital connectivity with suppliers is limited to email and sharing spreadsheets, a number which is significantly more than supply chain executives (16%). This also highlights an underestimation of supply chain’s progress in digital maturity.
Among other things, EY’s report also informs us on how an estimated two-in-five (39%) supply chain executives admit that one of the top challenges their organization currently face relates to proving the value of cross-functional collaboration.
“The series of supply chain shocks that started with the pandemic elevated the role of supply chain leaders in the C-suite, but executive teams are increasingly reverting to outdated views of the supply chain as a cost center rather than a growth engine,” said Ashutosh Dekhne, EY Americas Supply Chain & Operations Practice Leader. “Our research uncovered concerning perception gaps between supply chain and C-suite executives around the value of supply chain, the digital maturity of supply chains and the value of cross-collaboration.”
Alongside these findings, though, EY report would also go on to make certain recommendations for companies’ supply-chain decision-makers. An example of the same would a suggestion to create synergy between supply chain metrics and business objectives. With 97% supply chain leaders found to be up against a challenge of supply chain metrics, and with only 44% tracking customer satisfaction as a key performance indicator, supply chain strategies must integrate metrics that reflect not just cost efficiency but also contributions to customer service, responsiveness, and innovation.
Next up, the report offers a suggestion to extend the impact of supply chain and help it accommodate customer experience. You see, more than 84% of supply chain leaders have admitted to spending more time focused on internal operations than customer needs, whereas 76% were found to prioritize creating new and innovative products over creating the best customer experience. To remedy such a problem, those executives should integrate customer experience metrics into their reporting, as well as communicate customer successes to their C-suite colleagues.
Beyond that these execs can enable supply chain to lead organizational convergence. Already, 80% of supply chain leaders are improving internal cross-functional collaboration and 79% are improving cross-functional collaboration with external vendors. Hence, continuing to preach collaboration between supply chain functions and other departments should enhance transparency and align operations with business goals. As they do that, the C-suite leaders must also cultivate a future-ready supply chain workforce to address labor and skills shortages, one of the top three priorities currently for supply chain leaders.
