Gartner: Digital, trade, sustainability trends impact supply chain
Supply chains are in the middle of an evolution that will change how chief supply chain officers (CSCOs) operate, according to Gartner.
Gartner identifies three macro trends that will shape the future of supply chain: digital business, competitor and trade uncertainty, and sustainability and the circular economy. Following is a brief overview of Gartner’s analysis of each trend.
The rise of digital business
Gartner research shows that many CSCOs struggle to create a holistic digital supply chain roadmap. At the same time, they are under pressure from CEOs who want to make their business more digital. Given the critical role of supply chain in ensuring customer satisfaction and experience, Gartner expects much of the digitalization efforts will be on the shoulders of the CSCO.
According to Gartner research, the top barrier to a digital supply chain today is culture, followed by legacy technology, usable data, and legacy processes. CSCOs must work with partners across the business to overcome those barriers and enable their CEO’s digital business ambitions.
New competitor and trade uncertainty
In recent years, uncertainty has been a constant in the supply chain. There is uncertainty on where the next competitor will come from and what their impact will be. Gartner data indicates most half of CSCOs believe that their business is at risk of being disrupted in the coming years, with the greatest risk coming from non-traditional businesses such as startups.
There is also trade uncertainty, caused by events including the U.S.-China trade war and Brexit. More recently, the COVID-19 pandemic has raised concern about future pandemic, after shutting down global supply chains and trade routes.
Gartner advises that this ongoing uncertainty calls for a new approach to supply chain management, with CSCOs needing to build more flexible and resilient networks that can respond effectively to global shocks and disruptions.
Sustainability and circular economy
A circular economy is an economic model that separates the ability to achieve economic growth from the consumption of natural resources. Supply chain plays a critical role in every part of the cycle: make, use, return, recycle, reuse.
The 2019 Gartner Future of Supply Chain Survey found that 28% of organizations had already implemented circular design approaches in their innovation strategy, and 39% planned to do so within the next two years. According to Gartner, a supply chain that enables the circular economy has to have strong reverse logistics capabilities, including in the consumer products industry.
“CSCOs are tasked to design a supply chain organization that fits into this new era,” said Mike Burkett, distinguished VP analyst with the Gartner supply chain practice. “While in the past, a good supply chain was efficient and powerful, it must now be agile and fast.”