NEW research from Accenture finds that companies with the most mature supply chains achieve 23 percent greater profitability than the competition. These so-called leaders are six times as likely to use AI and generative AI widely across their supply chains, which allows them to generate additional business value. Conversely, low supply chain maturity among many organizations leads to limited ability to benefit from AI and generative AI.
In the report titled “Next stop, next-gen,” Accenture defines supply chain maturity as the extent to which companies have supply chains that use generative AI, advanced machine learning, and other evolving technologies for autonomous decision-making, advanced simulations and continuous improvement. These capabilities enable companies to adapt more readily to changes as they happen and adopt other new technologies seamlessly as they emerge.
The report further shows that between 2019 and 2023, “Leaders” — the 10 percent of companies scoring highest on the maturity scale — achieved 23 percent higher margins than their peers (11.8 percent vs. 9.6 percent). At the same time, they delivered 15 percent better returns to shareholders (8.5 percent vs. 7.4 percent).
While only 9 percent of all companies use AI and generative AI widely across their supply chains, significantly more leaders already do (37 percent) compared to just 6 percent of their peers. Leaders are also expecting to see significant benefits. They are eight times as likely to reduce the time it takes to develop and launch new products by 30 percent, 8.5 times as likely to develop eco-friendly products, and six times as likely to improve the efficiency of engineering resources by 30 percent.
However, the bigger picture painted in the report is alarming. While the average supply chain maturity score has jumped by more than 50 percent between 2019 and 2023, the average score across all companies remains low, at just 36 percent. It varies across industries and countries — from 22 percent in Mexico to 52 percent in Japan and from 31 percent for consumer goods companies to 40 percent for aerospace and defense firms.
According to the report, companies need new supply chain capabilities to be competitive in today’s economic context. They no longer operate in a time of stable economic growth and frictionless globalization. This means the old supply chain levers, such as global low-cost sourcing and specialized factories in low-cost locations, aren’t sufficient anymore.
The “Leaders” in the study highlight how adopting and scaling more mature capabilities leads to greater value. They can move beyond traditional deliverables to instead focus on driving sustainability and resiliency — and, in the process, achieve a new competitive advantage.
The question is, how do leaders across supply chain networks and operations make sure their investments translate into an actual increase in maturity — and business value? The study suggests that the keys to greater maturity are four enablers, which form the infrastructure necessary to implement and scale up the next-generation capabilities companies need.
These enablers are:
– Modernize and connect the IT landscape. Companies need to strengthen their digital core, using cloud, data and AI to build a suite of tools that integrates all major supply chain processes. Leaders are nearly twice as likely to have these architectured and interconnected tools.
– Implement an advanced data platform. A leading-edge operations data platform incorporates a unified and interlinked data model to help turn data into meaningful and contextualized insights. Leaders are 3.3 times more likely to have implemented such platforms.
– Localize the sourcing and production footprint. A previous Accenture survey reveals regional sourcing is expected to grow nearly 30 percent. When making major changes to localize networks, companies should enhance the digital maturity of their capabilities to support new, flexible approaches.
– Move toward an agile organization. Companies must create an “organization platform” to foster agility across the enterprise. Leaders are 3.3x more likely to have this environment. To scale this, it’s critical to have a vision for how to reinvent work and prepare workers.
The “Next stop, next-gen” research is based on a survey conducted in October 2023 among over 3,000 supply chain executives in 1,148 companies.
Accenture is a leading global professional services company that helps the world’s leading businesses, governments and other organizations build their digital core, optimize their operations, accelerate revenue growth and enhance citizen services — creating tangible value at speed and scale.
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