C-Suite and Supply Chain Execs Can’t Agree on Modernization Execution: EY
Supply chain investment has been top of mind for consumer goods manufacturers, particularly after the pandemic required businesses to operate differently to adapt to new market challenges. When it comes to supply chain investment, however, the C-suite and supply chain executives don’t always see eye-to-eye, according to a new report from Ernst & Young.
The organization surveyed 347 U.S. supply chain leaders, with 19% representing consumer products companies. While there’s often agreement over top supply chain priorities — among them is modernizing the supply chain through technology and digitalization — when it comes to the execution, they stand at odds.
Where are the Gaps?
There are three primary areas of conflict between CEOs, COOs, CFOs, etc., and SVPs and VPs of supply chain functions, according to EY: the value of the supply chain, achieving supply chain autonomy, and breaking down silos in the supply chain.
On the C-suite side, the supply chain is a cost center first and foremost, per 88% of respondents. However, 88% of supply chain executives identify it as a core influencer of customer needs — whereas a lower percentage (76%) of the C-suite believe the supply chain plays a significant role in promptly addressing customer needs.
When it comes to digital maturity, the C-suite and executives are on different timelines. Twenty-seven percent of C-suite leaders expect to achieve a mostly autonomous supply chain by 2040, while only 12% of executives agree. Thirty-nine percent of executives have much more lofty expectations, believing it can be achieved by 2030 — only 25% of the C-suite is on board.
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EY attributes C-suite skepticism to possible failures in previous supply chain technology implementations, or those scaled back due to challenges.
Lastly, C-suites and execs are having difficulty getting on the same page when it comes to cross-functional collaboration across planning, procurement, manufacturing, and logistics. Supply chain executives are much more likely to see the benefits of internal collaboration on both productivity and resiliency (64% vs. 45% C-suite).
This could be based on assumptions that internal collaborations are already occurring at the operational level, said EY.
As a result, modernization is taking place in silos, by function rather than holistically across the supply chain, and progress is encumbered by manual tasks. Twenty-two percent of supply chain leaders said their digital connectivity to suppliers is limited to sharing emails and spreadsheets and 42% said they are just beginning to adopt digital tools and/or cloud-based platforms for supply chain functions.
