What is the future of supply chain and what is Accenture’s role in redefining the supply chain of the future?
Today’s companies expect their supply chains to deliver holistic outcomes – agile and responsive to demand, resilient to disruptions, optimize total costs and all this in a sustainable way. Gone are the days when the primary focus of supply chain function was to manage costs. From supporting new customer experiences to driving profitability, expectations that were taking shape prior to the pandemic quickly gained momentum during the crisis, taking on new urgency. To meet these expectations, supply chain leaders must reimagine their supply chains. Every transformation initiative and investment decision must be tied to customer needs and environmental and social. At Accenture, we recommend a new triple mandate of 3Rs to create future-ready supply chains –
- Relevant – customer-centric, providing tailored experiences
- Resilient – protecting the company, customers, and partners from disruption to demand/supply
- Responsible – trust-based relationships, respect for society and the planet
Future-ready supply chains are focused on creating 360° value by visibility driving, velocity and new ways of working. These are pivoted on a foundation of shared business objectives between value chain partners, a flexible digital architecture including data, cloud, AI, hardware instrumentation, integrated platforms that work in combination to drive the triple mandate.
According to an Accenture report on future-ready supply chain operations, only 4% of chief supply chain officers (CSCOs) view their operations as future-ready and 34% expect to be there by 2023, which is an ambitious undertaking. Investments in building a customer-centric, intelligent supply chain network are also driving profitability and efficiency for companies. Our research shows globally, leading companies experience 13% incremental revenue growth, 2.5% higher EBITDA margin and 3x higher contribution to growth.
Our vision is to help clients create enduring change by reimagining tomorrow’s supply networks to positively impact business, society, and the planet. Efficiency is table stakes now.
How can technology bring in value for supply chains?
Technology is much more than just systems. Its real impact is in creating business value. It can help replace inventory with real-time information across the supply chain.
Let’s start with the 3Rs – the triple mandate. The first ‘R’ – Relevance, is about providing superior customer experiences. Technology provides an unified view of demand and supply, improves forecast accuracy, drives intelligent customer segmentation strategies and integrated business intelligence to discover insights. It dials in analytics and data driven decision making leveraging a range of closely-knit technologies like point-of-sale systems, automation, e-commerce, big data analytics and AI. For example, Accenture helped in the micro-segmentation of customers and products at a leading Indian beverage and consumer goods company. This helped the company gain deeper insights into customer preferences, thereby optimizing costs to serve and meet specific customer requirements.
Let’s talk about the second ‘R’- Resilience. Technology amplifies visibility, velocity and reduces variability in the supply chain ecosystem. It has been playing a fundamental role in exception reporting, alert messaging in the hands of the stakeholders, providing early warning signals in case of impending disruptions. Simulations and advanced AI engines are able to plan for disaster scenarios, provide mitigation options for businesses to flex their supply chains. Integrated, intelligent control towers are a possibility only due to technology and this is a key mega trend in businesses today.
By seamless sharing of information, technology is allowing for the creation of virtual chains which work together to exploit fast-changing opportunities. For example, for a leading Indian food and beverage company, Accenture helped to implement an integrated supply chain platform to improve end-to-end visibility across the value chain. This provides them with the ability to handle customization, planning for diverse inventories quickly with minimal human intervention, thereby ensuring the availability of fresh stock at minimal cost.
Finally, the third ‘R’ – Responsible. Today, the world is talking about circular, design for re-manufacture, design for environment or reverse logistics, sustainability in product design and a lot more. This requires suppliers, vendors, customers, manufacturers, logistics providers to integrate and share common sustainability goals and principles. Technology is the glue that will enable companies and businesses to work in unison to achieve shared sustainability objectives. Technology will drive transparent sharing of operational data, work practices, energy consumption, product quality, track and trace capabilities, and sharing of business value across the value chain.
What will a flexible, customer-centric retail experience of the future look like?
We envision a new integrated reality for the near future of retail. New models like Online-merge-offline (OMO) model are going to redefine the customer shopping experience. It calls on retailers to think beyond omnichannel and reimagine how they operate across all retail channels. Accenture’s Store of Tomorrow concept presents how the OMO model will look like. Applicable across all sectors of retail, this is designed to be flexible, and adaptable in every aspect. With human-centred physical shopping experience at the core, the concept drives the velocity and convenience of digital shopping with the automated efficiency of modern warehousing.
This concept has 3 prominent components: The Aisle, the Dark Store, and the Promenade. These three complementary parts blend the basic principles of today’s shelf organization with micro-fulfilment centre, providing a flexible “playground” area for product discovery. The Store of Tomorrow concept breaks the traditional mindset that e-Commerce means lower profitability by simplifying the omnichannel customer journey and providing newer revenue generation and cost optimization opportunities.