Only 10% Of Companies Have The Customer-Centric Supply Chains Required For Resilience

Only 10% of Companies Have the Customer-Centric Supply Chains Required for Resilience, According to New Accenture Report

With COVID-19 magnifying the challenges and changing global demands of supply chains, now is the time to make the lifeline of humanity more responsible and relevant than ever

NEW ZEALAND; August 4, 2020 – Just 10% of companies were on the right path to building customer-centric supply chains that are resilient and enable growth prior to the COVID-19 pandemic, according to a new report from Accenture (NYSE: ACN). While supply chains have traditionally been a driver of efficiencies and scale, the report discusses how their role in recent years has evolved beyond mere efficiency, and toward lasting growth.

Based on a global survey of 900 senior executives from nine major industries across 10 geographies, the report, titled “A License for Growth: Customer-centric supply chains,” identifies major supply chain challenges that have only been magnified by the ongoing COVID-19 global crisis including: inflexibility to deliver undifferentiated customer offerings; poor ecosystem design lacking the right partners; and a siloed technology architecture that stifles collaboration and co-innovation. The report also outlines leading practices of a few selected companies that have transformed their supply chains and created a customer experience that is both purpose-led and focused on growth.

“The arrival of COVID-19 has forced many New Zealand organisations to rapidly adapt and manage change. As Kiwis saw with the run on supermarkets, one of the most significant lessons has been around the need for building and maintaining an agile supply chain and network that is able to move quickly and flexibly,” said Paul Hearnden, Technology Lead, Accenture New Zealand. “New Zealand companies have done well to respond to the massive disruption and as they begin to adjust and future proof their models, they need to take into account: agility and speed, including how intelligence is shared across the supply chain; sustainability of the production loop from recycle to reuse; localisation of suppliers to reduce risk and transportation; and partnering for the long term with companies who are resilient and focused on delivery of outcomes in good and bad times.”

The companies in the report have invested NZD$236 million, on average, over the past three years to transform their supply chains. However, it is just a small group — 10% of those surveyed — that are effectively using their investments to transform their supply chains to meet increasing and evolving customer experience demands.

The Accenture analysis found that these leading companies follow four key practices that cement them as leaders among their peers:

1. Begin with the customer in mind. Base supply chain strategy on what the customer values, which is a more complex endeavour than ever before because customer experiences are now purpose-led and personalised. More than two-thirds (71%) of the leading companies build supply chain strategies to deliver experiences linked to key customer value propositions, such as sustainability, data privacy/security and customised delivery and service.
2. Turn insight into innovation. Invest in building analytical, asset-light collaboration architectures, which could significantly increase the supply chain’s impact on revenue and shared success within and outside their ecosystems. In fact, more than half of the average revenue growth that the leading companies experienced came from collaboration tools and data-driven insight technologies.
3. Develop targeted capabilities. All of these leading companies, whether B2B or B2C, have built 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.
4. Engage the CEO beyond conversation. Support from the top is key to true supply chain transformation. The CEOs of these leading companies are more likely to drive supply chain discussions with their boards and translate those discussions into results. More than half (53%) of these CEOs allocate funding to drive supply chain innovation, and 49% allocate top talent to accelerate supply chain transformation.

The report also includes analysis proving that the efforts taken by these leading companies have paid off. Accenture’s financial analysis of these leaders has found that during the period from 2017-2019, they have outperformed other companies in several areas. For instance, they grew revenues 13%, on average, compared with an average revenue decline of 5% for the other companies. Moreover, their supply chain contribution to total revenue was triple that of the other companies’ (52% vs. 17%); and they delivered EBITDA* margins 2.5% higher than those of the other companies.

For the full report, please visit: www.accenture.com/resilientsupplychains

About the Research

Accenture surveyed C-level executives from 900 companies from nine industries across 10 geographies during December 2019 to February 2020 to understand how they are transforming their existing supply chains into ones that deliver customer experience-led growth. Accenture used econometric modelling to estimate the impact of collaborative analytical asset-light architecture on revenue growth. Additionally, Accenture used the CapIQ database to highlight the differences in 10% of the companies surveyed, who are top performers, versus others on indicators such as EBITDA and share price movements.

*A standard accounting measure, EBITDA refers to earnings before interest, taxes, depreciation and amortisation.

About Accenture
Accenture is a leading global professional services company, providing a broad range of services in strategy and consulting, interactive, technology and operations, with digital capabilities across all of these services. We combine unmatched experience and specialised capabilities across more than 40 industries – powered by the world’s largest network of Advanced Technology and Intelligent Operations centres. With 513,000 people serving clients in more than 120 countries, Accenture brings continuous innovation to help clients improve their performance and create lasting value across their enterprises. Visit us at www.accenture.com.

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