Gartner: Three CEO Concerns that CSCOs Must Address
Unless your head has been buried in the sand ─ which I’d completely understand ─ you’ll be aware that the COVID-19 pandemic has disrupted, and in some cases, shattered global supply chain networks. It has been both a blessing and a curse to industry-seasoned professionals, as it has laid bare the structural and organisation inefficiencies and weaknesses eroding the core of many organisations. Fortunately, though, it presented chief supply chain officers (CSCOs) with an opportunity to reinvigorate and revitalise stagnating supply chain norms, and a chance to align their actions with three important CEO concerns, going forwards.
During the recent Virtual Gartner Supply Chain Symposium/Xpo, EMEA, the research firms analysts discussed how CSCOs could address the concerns of CEOs in a new, COVID-19-transformed world.
“When we conducted the annual Gartner CEO and Senior Business Executive Survey in the fourth quarter of 2019, many CEOs anticipated an economic downturn for 2020, and that was without the knowledge that a global pandemic was on the way,” said Thomas O’Connor, senior director analyst with the Gartner Supply Chain Practice.
“Those CEOs were already planning for reduced hiring, an emphasis on cost optimisation, but also an increase in digitisation efforts. And this is exactly what happened, though for a very different reason,” he added.
The Three Concerns:
The Challenges of a Changing Global Ecosystem
“With increased uncertainty around tariffs and trade regulations, CEO’s were already planning to redevelop their supply chains due to the impact of new international tariffs and trade controls. And now, given the pandemic, 21% of supply chain leaders believe their supply chain is highly resilient (according to a Gartner survey of 260 supply chain leaders in February 2020), with 55% expecting to be highly resilient within 2-3 years. CSCOs should prepare to present their plans to the C-Suite.
“Resiliency can always be improved, but there [are] trade-offs. More resiliency often means a supply chain organisation that is less lean, less agile and holds more inventory,” Mr O’Connor added. “CSCOs must explain that a supply chain needs to be resilient, but also work economically. Balance is key.”
“Despite 2020 being a cash-sensitive year, 39% of manufacturing businesses indicated that they had increased their technology investment beyond pre-COVID budgeted levels. CSCOs must make sure that any investment they are proposing aligns with their CEO’s critical priorities – growth, financial stability, cost management and risk management.
“CSCOs must make clear that today’s digital progress secures the options of tomorrow,” Mr O’Connor said. “For example, supply chain organisations with the right digital capabilities can act as the central nervous system of the business that senses risks and opportunities and enables real-time action.”
Structural Shifts in the Workforce
“Despite the majority of organisations implementing a hiring freeze during the pandemic, most CEOs recognise that the structure of their workforce needs to change. While this concerns all parts of the business, it’s the responsibility of the CSCOs to make sure that their organisation design is appropriate for an increasingly digitalised world, while properly upskilling supply chain staff and ensuring new talent is motivated by the prospect of a robust career path.
“Training employees, according to a clearly defined vision, is critical to gain buy-in from leadership and staff alike. CSCOs can perform a gap analysis to understand where the organisation lacks key skills and develop a strategy for either hiring those skills or upskill the existing work population,” Mr O’Connor concluded.”
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.