Gartner: Three Ways for Supply Chain Leaders to Adapt
The COVID-19 pandemic has put Chief Supply Chain Officers under intense pressure to operate with an agile and lean approach in order to prepare their networks for an uncertain future.
During the opening keynote of the Gartner Supply Chain Symposium/Xpo, Gartner analysts discussed the challenges and opportunities these disruptive times are for supply chain leaders.
“Companies that achieve long-term efficient growth over their industry peers during turbulent times, do so because they are better at protecting large, transformative growth bets across the business cycle,” said Tom Enright, vice president analyst with the Gartner Supply Chain practice. “They avoid reactive responses to macroeconomic conditions and take advantage of uncertainty to break away from industry competitors.”
“The call to action for supply chain leaders has been seemingly clear: Survive the current turn and prepare our organisation for the new normal. However, our research shows two things to be true: Survival cannot be the goal and there is no such thing as the new normal,” added Lisa Callinan, vice president team manager with the Gartner Supply Chain practice.
In a bid to harness long-term growth through uncertain times, Gartner has outlined three vital areas that CSCOs should choose to adopt an adaptive approach across operations.
1. Adaptive Strategy
80% of organisations still centre their strategic planning cycles on an annual calendar, according to Gartner research. This means that the strategy could be outdated in the case of a disruption during the year and there are no resources available to reevaluate the new situation and pivot quickly. Adaptive strategy is a change from the previous point in time exercise to a continuous adaptive process. The approach recognises that regular changes in response to a dynamic external environment is the only way to keep pace and grow stronger. “Supply chain leaders should make it a regular exercise to learn about, and evaluate, the current trend landscape. They must focus on those trends that will impact their business and present opportunities to grow and gain an advantage over competitors,” Enright commented. “It’s crucial to regularly update the strategy to reflect changes. Adaptive strategic planning is an always-on activity to navigate and succeed through any turn, in any version of the future.”
2. Adaptive Investments
Further to strategy, adaptive investments could be a priority for CSCOs. According to Gartner research, 72% of strategists say slow budget reallocation is the biggest barrier to a more adaptive plan. Supply chain leaders must work to remove this barrier and align integrated processes such as investments and budgeting through the adaptive approach.
“A second option is to mimic the approach that venture capital firms use when assessing whether to fund early-stage start-ups. Success with a prototype or trial is the basis for developing more accurate estimates on how much further funding is needed. Teams feel less constricted and feel less pressure to present a solution that guarantees returns from the start,” added Callinan.
3. Adaptive Leadership
The immediate aftermath of the COVID-19 crisis demanded acute skills from leaders. In order to respond to the initial chaos and make teams comfortable through remote working environments and strengthen their organisation, supply chain leaders had to significantly rethink what constitutes effective leadership. This requires endurance and resilience to sustain recovery over a significant period of time where safety, well-being, fatigue and burn-out are major issues for supply chain teams. “This next phase will demand another set of skills from leaders. They will need to balance their leadership style and develop skills as a master communicator to empower change and adaptability within the supply chain organisation,” Enright added.