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Technology can help make supply chains more resilient

23 January 2023

Research from Capgemini reveals that three-quarters of organisations have been impacted by closing facilities, supply chain disruptions, employee absence, and remote work in the past three years, and less than 20% of organisations feel equipped to handle the impacts of these changes.

Capgemini Research Institute’s report, “How greater intelligence could supercharge supply chains”, explores how technology can be employed to create more resilient, sustainable, and intelligent supply chains. 

Greater focus on sustainability, global socio-economic changes, and shifting consumer demands has resulted in disruption to supply chains. In this context, the most pressing concerns are reducing CO2 emissions across all tiers of the supply chain (95%). Around 92% of organisations surveyed said that the ongoing relocation of the global supply chain will impact them but only 15% are equipped to deal with this. 

Investing in supply chains now is critical to be prepared to meet future demands, cites the report. On average, over the next three years, organisations plan to increase their investment in supply chain transformation by 17%.

“There are numerous building blocks that need to come together to create a future-ready supply chain network and provide differentiated offerings that customers are looking for. The last few years have highlighted the need to build agile and resilient supply chains, not only to cope with disruptions but also to help them stay ahead of the curve, especially from a sustainability perspective,” said Mayank Sharma, Global Supply Chain Lead at Capgemini. “It is clear that there’s no one-size fits all solution, but organisations that lay the foundation for a data-driven, technology enabled, scalable, and sustainable supply chain are the ones that will reap the most impressive returns in terms of driving improved customer loyalty, creating more business value and meeting sustainability goals.”  

The report highlights a need to design resilient, connected networks with integrated data-driven planning. It suggests that technology will be a critical enabler here, giving access to real-time insights which can enhance the ability to predict change and help plan for possible future scenarios.

‘Supply chain masters’ – organisations defined as having displayed the ability to successfully balance multiple demands on their supply chain – are already reaping business benefits. The research found that this small cohort of respondents (9.5%) reported a 15% incremental growth in revenues, a 17% reduction in CO2 emissions as well as a 1.8% higher market share when compared with others. 
 
Focus on sustainability 
Supply chains currently account for over 90% of an organisation’s greenhouse gas emissions. Companies are increasingly reshaping business strategies to prioritise sustainability, with many setting top-line targets to improve the overall environmental impact of their products and services. There is a clear need for supply chains to be at the core of these sustainability initiatives.  

The majority of organisations surveyed recognise the need to reduce CO2 emissions across the entire supply chain, but only 13% feel well prepared to handle these changes. Currently, reducing Scope 1 emissions dominates sustainability initiatives (38%), versus Scope 2 and 3 emissions which account for 22% and 27% respectively. The report suggests that sustainable practices must be adopted across the value chain with transparent metrics set to measure performance plus real-time tracking systems implemented to monitor performance. Investing in supplier training and education initiatives will help to empower stakeholders to make a real impact and enable an organisation to reach its sustainability goals.

The research found that only one-in-four have started scaling sustainability initiatives in their supply chains, highlighting opportunity for improvement.

Building a composable, integrated, and customer-centric architecture will enable organisations to respond quickly and mitigate supply or fulfilment risks. Integrating existing, otherwise-siloed supply chain management systems will enable organisations to collate, analyse and react to the data that a network produces. The research found that supply chain masters stand out from other players by how quickly and accurately they complete this process of aggregating, analysng, and acting upon data. Those who adopt a centralised ‘control tower’ approach – where data is collated in one cohesive and connected dashboard – will help break down silos within the supply chain network to provide end-to-end visibility that enables harmonised management. 

To download the report go to https://bit.ly/3GCVsep


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