Supply Chain as a Partner for Growth

One member has seen an enormous unlock in aligning the organization (sales, supply chain, finance, etc.) and accountability to business units. It is driving a one-team mentality, where specific function and suborganization are secondary.

Gartner sees a broader, cross-industry trend of companies reorganizing themselves in line with major business units. This allows for faster and more tailored support, which is critical in today’s dynamic business environment.

For this shift to be effective, however, functional organizations such as supply chain need to have already gone through a process of centralization and standardization across people, process and technology, in line with a traditional organizational maturity model.

Sustainability driven by business units (BUs) is an example of where significant progress can be made since BUs own making investments and P&L tradeoffs over the long-term horizon. There may be some areas (e.g., total Scope 3 emissions reduction), where some corporate-level oversight is required to ensure scale.

Supply availability and reliable customer service are differentiators in the current environment, but once markets move closer to supply equilibrium, these revert to being table stakes.

The next competitive frontiers will be customer ease (i.e., frictionless experience) and customer enablement, which is providing solutions that make their business more successful and their operations more effective and efficient.

Running customer councils and “going to the gemba” (i.e., walking the floor and flow) at customer sites are fundamentals of delivering customer enablement.

Many companies and supply chains have shifted to fast-cycle decision making. The focus is on being roughly right and providing optionality in a responsive way, as opposed to being 100% precise after a long period of analysis and socialization with stakeholders.

An enabler of fast-cycle decision making is building a common data set and processes that prompt decisions, as opposed to relying on deep subject-matter experts to analyze situations and drive decisions through executive forums.

In workforce management, building radical flexibility has been a key to employee engagement and retention. Centralizing traditional roles such as manufacturing finance and planning decouples those positions from a site/geography and allows them to be remote roles.

Several leaders, including General Mills, highlighted diverse talent as enabling the business to survive – a key pillar of a resilient supply chain and broader business success. What differentiates the leaders is embedding DE&I in workforce planning processes, with ambitious goals and a formal performance management system.