Preparing for an unprecedented shift in supply

While the majority (61%) of CSCOs said they were prepared to handle a shift in existing global trade and supply chain networks, the reality of the coronavirus outbreak showed that only about 3% of firms were fully prepared.  Seth Steinberg, Principal of Korn Ferry’s New York office and a member of the firm’s Supply Chain Center of Expertise says, “While this was indeed a black swan event, Covid-19 showed us there was a lot of overconfidence and blind spots in the value chain; and aside from dealing with a cash crunch and workforce disruptions, firm’s must press ahead with their restart.”

Indeed, many companies were pushing a “just-in-time” supply chain with tightly integrated global systems and a lean, waste-free operating model. But the 2020 pandemic showed that approach may not be realistic going forward. “Being prepared now means having the ability to recalibrate, evolve, and adapt quickly to changes in market conditions,” says Dustin Ogden, Senior Client Partner in Korn Ferry’s Global Industrial practice. “Historically, supply chains have been mainly reactive to market changes. Predicting potential changes and preparing creative solutions for different scenarios instead of just responding real-time to them will open up new opportunities.”

The need for advanced analytics

For supply chains to truly propel organizations forward, CSCOs said developing their advanced analytics capabilities will be paramount. Indeed, the top two skills CSCOs are looking to bring into their teams are data science/advanced analytics (45%) and supply chain planning (36%).

Accelerating CSCOs onto the path of success

Today’s business environment has shown that companies fare best when the supply chain is seen not only as part of the strategy but as a “commercial weapon for business,” Steinberg says. “They’re no longer just making the trains run on time.” Yet the survey showed a disconnect in that goal, with almost half of CSCOs (45%) not reporting to the CEO. Moving forward, when asked what they needed to be more effective, 52% of respondents answered either greater alignment with other C-suite roles (36%) or more support from the CEO (15%).

CSCO Action Plan

Immediate:

• Protect the welfare of employees
• Manage cash and secure critical supply
• Find new ways to configure and lead supply chains

Intermediate:

• Evaluate supply chain actions within the content of geographic location and sector
• De-risk supply by reviewing supplier healthiness
• Anticipate the future when supply and demand landscapes are uncertain

Long-term:

• Redefine what a “responsible” supply chain looks like; reassess the trade-offs of efficiency versus local sourcing and redundancy
• Reconsider what you make versus what you buy for the chain
• Look to scale up or down the ability to shift production fast