Designing a Customer-centric Supply Chain for Growth

By Anand Darbhe, Managing Director, Strategy & Consulting – Supply Chain & Operations, Accenture

Supply chains have traditionally been seen as drivers of efficiencies and scale, providing a competitive cost advantage. Though in recent years, the role of supply chains has evolved beyond efficiency to growth. COVID-19 reinforced the need for supply chains to be more resilient. Our research reveals that companies experience five major challenges as they rebuild for resiliency and growth. While these challenges existed before COVID-19 struck, the impact has been magnified now. Broadly, the challenges include:

  • Flexibility: Companies face difficulty in differentiating customer offerings on demand because manufacturing and supply chains lack flexibility.
  • Ecosystem design: They also experience an inability in identifying the right partners to innovate and deliver value on demand.
  • Digital Architecture: Mostly, their technology architecture is not designed to drive cross-collaboration and co-innovation.
  • Innovation: Innovation in the supply chain is not robust enough and many companies lack the ability to scale beyond prototype testing.
  • Visibility: Often supply chains lack the end-to-end, real-time visibility that creates trust and transparency for customers.

Our research indicates that the way leading companies solve these challenges can be adopted by other organizations to create a more resilient supply chain that fuels growth. The key factors which differentiate leaders from the rest are the following:

Customer centricity: Leading companies base their supply chain strategy on what the customer values, which is a more complex endeavour than it used to be, as customer expectations are now far more tailored and personalized. In our survey, 71% of leading companies deliver experiences linked to the right customer value propositions. For example, Accenture helped a leading Indian food and beverages company to implement an integrated supply chain platform to improve its end-to-end visibility across the value chain to meet growing consumer demands and enable purpose-led growth. This helps them to fulfill customized orders and handle diverse inventories quickly and with minimal human intervention thereby ensuring the availability of fresh stock at a minimal cost.

Turning insights into innovation: Leading companies invest in digital architecture, creating a foundation for collaboration, inside and out. Data has become the new currency feeding that value, so organizations are investing in new technologies to turn data into insights. As they mature, they move from diagnostic to predictive and prescriptive business models. This helps provide a solid basis for collaboration inside the company and with ecosystem partners to meet evolving customer expectations. According to our research, more than two-thirds of leading companies saw revenue growth increases as a result of collaboration, innovation, and data-driven insight technologies. Leading companies are using digital technologies in multiple areas. For example, an industrial conglomerate has a digital-powered production system, in which they are creating digital twins of products they want to manufacture, testing them in an augmented reality-based environment, instead of building new products. Accenture helped in the implementation of an advanced machine learning-based forecasting solution at a leading consumer goods company which improved forecasting accuracy by 8 – 10% over traditional methodologies.

High maturity in select capabilities: Successful companies focus on capabilities that enhance supply chain agility and foster innovations. These organizations are rapidly developing key customer-experience capabilities and are ahead of their peers in implementing these capabilities, which gives them greater supply chain agility. Leading companies have invested in building advanced capabilities to segment their customers and products in real-time so they can better deliver personalized product and service offerings. For example, Accenture helped in the micro-segmentation of customers and products at a leading Indian beverage and consumer goods company to gain better insights into customer preferences, thereby optimizing costs to serve and meet specific customer requirements.

Leadership engagement: Within leading companies, the CEO is more likely to drive supply chain discussions at the board level. And they translate those discussions into results—actively allocating funds and talent that fuel innovation capabilities and transformation for their supply chain. Our global research says that close to 50% of CEOs drive supply chain transformation during discussions with the board, allocate funding to drive the innovation required for supply chain transformation, and allocate top-level talent to supply chain transformation. In India, we have consistently seen CEOs across consumer goods, life sciences, and other industries driving supply chain digitization agenda across the organization.

Investing in an intelligent supply chain network, powered by digital technologies is helping companies become more profitable and efficient. Our research shows globally, leading companies experience 13% incremental revenue growth, 2.5% higher EBITDA margin, and 3x higher contribution to growth.
Anand Darbhe, MD, Strategy & Consulting – Supply Chain & Operations, Accenture

“Though organizations are investing heavily in the digital capabilities of supply chains, generating growth from the investments is becoming increasingly important. Organizations need to define their own north star by articulating the customer experience and then creating a business case and roadmap. They should embrace collaboration to co-innovate across the ecosystem and grow a digital workforce by defining future roles and capabilities.

Finally, they should focus on value creation leveraging sprint methodology for quick tangible outcomes. And there has never been a better time to do it, as not just business—but the world at large—relies on companies getting the supply chain right.”

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