CSCO Study: Achieving data-led innovation

Originally published 20 September 2022

Business today is anything but usual—and this is especially true in supply chains, where it’s no longer a question of if a major disruption is coming, but when. Now is the time for Chief Supply Chain Officers to prepare for what happens next.


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    Originally published 20 September 2022

    86%

    increase in the importance of macroeconomic forces over the next 2-3 years, according to CSCOs.

    95%

    more digitalization and AI automation are used by top-performing CSCOs, compared to their peers.

    36%

    increase in CEOs citing supply chain disruption as one of their greatest challenges.

    Another day, another crisis

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    A persistent pandemic, economic uncertainty, and a global geopolitical conflict continue to dominate headlines and fuel Chief Supply Chain Officer (CSCO) frustrations. Navigating uncertainties—and managing supply chain challenges accordingly—has out of necessity become a top business priority for boards and C-suites alike.

    86%

    increase in the importance of macroeconomic forces over the next 2-3 years, according to CSCOs.

    95%

    more digitalization and AI automation are used by top-performing CSCOs, compared to their peers.

    36%

    increase in CEOs citing supply chain disruption as one of their greatest challenges.

    Over the next two to three years, CSCOs say that issues related to supply chain disruptions, technology infrastructure, sustainability, and market shifts are their greatest challenges. Yet when addressed with an open mindset, challenges create opportunities—and visibility. A heightened emphasis on supply chain functionalities and roles is giving CSCOs the expertise, latitude, and organizational authority to innovate into a data-led future.

    CSCOs are walking a tightrope
    Time, attention, and resources are finite entities—and what we’re seeing are moment-by-moment trade-offs and compromises as CSCOs rebalance and reimagine their operations.
    Data is destiny
    Today’s CSCOs have created a foundational approach that can reap benefits, whether a supply chain is focused on efficiency and resiliency today or data-led insights and innovations that illuminate the future.
    Transformational technologies lead the way
    CSCOs who outperform their peers are investing aggressively in scaling infrastructure and hybrid cloud, AI-enabled workflows, sustainability, and cybersecurity.
    “I would tell a new Chief Supply Chain Officer to make sure your foundation is solid and that you’re managing the day to day, and then ask, where’s technology going?”
    Mike Corbo
    Chief Supply Chain Officer, Colgate Palmolive
    Listen to Mike Corbo’s advice for new CSCOs.
    Order out of chaos

    With disruptions looming around every corner, CSCOs will need deep organizational awareness to keep their balance. AI and intelligent workflows can deliver 360-degree insights and impact analysis that provide interconnectivity and help with predictability. Intelligent workflows can help the workforce—digital and human—dynamically adjust to the unforeseen with both self-learning and self-calibration. And automation—ranging from chatbots to robots—is an essential component.

    In fact, how CSCOs prioritize technologies speaks volumes to their near- and mid-term devotion to intelligent workflows to monitor and take action.

    Great expectations
    Most CSCOs believe AI will deliver results over the next 3 years—though other exponential technologies aren’t far behind.
    IBMInstitute for Business Value
    “The one thing that I think we need to address at scale is labor and people. And I just do not see it. Suddenly, it feels like we have lost 20% of the workforce.”
    Sophie Bechu
    Chief Operations Officer, Philips
    Listen to Sophie Bechu’s perspective on the need for talent.
    From “now” to “next”

    Universal problems can prompt a universal response, and that’s the case with CSCOs. Across the spectrum, CSCOs have adopted a steady-as-they-go emphasis on automation, AI and intelligent workflows, ecosystems, and sustainability.

    But with a steely eye to the future, a group of CSCOs who are outperforming their peers stands out in their obsession with investing in transformational technology. They’re ratcheting up these strategies, adopting a data-driven approach that emphasizes four tech-enabled areas:

    Hybrid cloud

    Adopting hybrid cloud enables CSCOs to extend the value and reach of their legacy applications and data in a flexible infrastructure that also accommodates the exponential technology needed to drive innovation.

    AI-enabled workflows

    Top-performing CSCOs are simulating decision impact, anticipating operational challenges, modeling pre-emptive new strategies, and—critically—evaluating options when there’s no available historical data.

    Sustainability

    58% of top-performing CSCOs see opportunities to bond with customers over sustainability imperatives, using that shared mission to improve customer engagement and fulfillment.

    Cybersecurity

    According to IBM research, 47% of attacks on manufacturing were due to vulnerabilities companies could not—or failed to—patch. The top tier of CSCOs report outperforming their competition on cybersecurity 16% more than other CSCOs.

    Move toward data-led
    innovation with our
    action guide
    .
    Move toward data-led innovation with our action guide.
    Automation
    • Accelerate automation in extended workflows
    • Amp up AI to make workflows smarter
    • Cultivate collaborative ecosystems
    Sustainability
    • Link environmental and social initiatives with business solutions
    • Optimize workflows with AI to manage carbon, waste, energy, and water consumption
    • Compete with new sustainable products and services
    Modernization
    • Architect modern infrastructures
    • Scale hybrid cloud platforms
    • Increase awareness of cybersecurity vulnerabilities and solutions
    Automation
    • Accelerate automation in extended workflows
    • Amp up AI to make workflows smarter
    • Cultivate collaborative ecosystems
    Sustainability
    • Link environmental and social initiatives with business solutions
    • Optimize workflows with AI to manage carbon, waste, energy, and water consumption
    • Compete with new sustainable products and services
    Modernization
    • Architect modern infrastructures
    • Scale hybrid cloud platforms
    • Increase awareness of cybersecurity vulnerabilities and solutions

    IBMInstitute for Business Value
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