Jul 10, 2020

Accenture: customer centric supply chains for resilience

Supply Chain
Technology
Resiliance
covid-19
Georgia Wilson
4 min
Supply Chains
Accenture research highlights only 10% of companies have a customer centric supply chain needed for resilience following the outbreak of COVID-19...

With the outbreak of COVID-19 magnifying supply chain challenges, as well as changing global demand, Accenture believes that it is time to make supply chain’s more responsible and relevant. 

According to a new research study conducted by Accenture, only 10% of companies were on the right path prior to COVID-19 to build a customer-centric supply chain that is resilient and enables growth. While traditional supply chains have been driving efficiency and scale, the report highlights the shift among supply chains in recent years to evolve beyond efficiency towards lasting growth. 

The research conducted by Accenture surveyed 900 senior executives from nine major industries in 10 geographies, titled: ‘A License for Growth: Customer-centric supply chains’.

Within the research Accenture highlights that major supply chain challenges within the industry have only been magnified with the impact of COVID-19. Such challenges include: “inflexibility to deliver undifferentiated customer offerings; poor ecosystem design lacking the right partners; and a siloed technology architecture that stifles collaboration and co-innovation.”

Additionally the report outlines leading practices of companies that have transformed their supply chains, developing a customer experience that isd purpose led and focused on growth. 

“The supply chain has always been the lifeline to humanity. The COVID-19 health crisis has brought to light the critical need for a resilient supply chain that produces and delivers all essential goods and services quickly, safely and securely,” said Kris Timmermans, a senior managing director and global supply chain and operations lead at Accenture. “Companies have moved quickly to prioritize transparency and enable faster decision-making. Now they must double down on building more customer-centric, purposeful supply chains that will lead to growth as economies rebound.”

Companies within the report have invested US$153mn - on average - over the past two years to transform supply chain operations. However this is only 10% of those that were surveyed which are effectively using their investments to meet increasing and evolving customer experience demands.

Accenture found that leading companies in this area followed four key practices to drive customer centricity:

  • Begin with the customer in mind: Accenture details that customer centric supply chains, base strategies on what the customer values, “which is a more complex endeavour than ever before because customer experiences are now purpose-led and personalised.” The report highlights that 71% of leading companies build supply chain strategies to deliver experiences linked to key customer value propositions.
  • Turn insight into innovation: leading companies invest in building analytical and asset-light collaboration architectures, “which can significantly increase the supply chain’s impact on revenue and shared success within and outside their ecosystems,” commented Accenture. 
  • Develop targeted capabilities: whether B2B or B2C, leading companies have established capabilities to segment customers and products in real-time. “They’ve partnered with procurement to design products and services and identify potential suppliers to achieve target margins. They also invest in advanced cybersecurity capabilities to address the growing security threats from data breaches and data theft,” noted Accenture.
  • Engage the CEO beyond conversation: ”support from the top is key to true supply chain transformation,” highlights Accenture. Currently, 53% of CEOs allocate funding to drive supply chain innovation and 49% allocate top talent to accelerate supply chain transformation.

The report also included the successful results the leading companies have achieved due to this mindset and strategy. The report found that during 2017-2019 the leading companies for supply chain transformation have outperformed companies in several areas including:

  • Revenue growth of leading companies on average grew 13% compared to a revenue decline of 5% for other companies
  • Supply chain contribution to total revenue tripled what other companies contributed (52% vs. 17%)
  • Leading companies also delivered EBITDA margins of 2.5% more than other companies 

“The uncertainties posed by COVID-19 show no signs of abating just yet and Brexit is bringing an additional set of challenges for UK businesses,” said Stephane Crosnier, Supply Chain & Operations Lead for Accenture UK. “Learning from these leaders will be essential as UK businesses seek to handle these difficult market conditions. Now, more than ever, is the time to look at the formula that leading companies have developed and channel it in their own supply chains. Building more customer-centric supply chains will ensure they can continue to serve their customers and communities whilst driving long term growth in what remains a very uncertain future.”

To view the full Accenture report, click here!

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