Leaders Forum 2022: The Supply Chain New Deal

By Stan Aronow | July 29, 2022 | 0 Comments

Supply ChainBeyond Supply ChainSupply Chain Strategy, Leadership and Governance

In mid-July, we held our annual Supply Chain Leaders Forum event in London. It was a glorious in-person reunion for our community of COOs and heads of large global supply chains.

The theme of this year’s conference was “The Supply Chain New Deal.” Almost a century ago, in the depths of the Great Depression, there was a massive shift in the relationship between government and society. In the United States, this was called The New Deal, and we now use the phrase to indicate changing paradigms.

The unprecedented disruption of the past three years has driven similar seismic changes in our world of supply chain. We explored the positive and negative implications of these changes during our two days together at Leaders Forum. And those changes and their implications have led to the development of the Supply Chain New Deal.

One silver lining of this New Deal is that supply chain and operations leaders play a much more impactful role for their companies, and the ecosystems they influence for results and change. Despite an environment of unending risk and disruption, supply chain has emerged as a partner for growth in the business.

Our leaders have been steadily handed more scope including, in many cases, significant roles in product development, customer experience, sustainability and digital transformation. Boards and executive committees now recognize supply chain’s critical role in helping the business survive and thrive.

Of course, none of these results can be accomplished without our people. The leaders in our community share an intense focus on being competitive, collaborative and connected in the current age of hybrid work and on a journey toward hyper-automation.

What Did We Learn?

We had a stellar line up of speakers at this year’s event, including an opening keynote by Joaquin Duato, CEO and board member at Johnson & Johnson (J&J). Duato gave an inspiring talk that highlighted the fact that advances in digital, coupled with developments in personalized therapies, are priming a medical revolution – one that may drive more progress in healthcare over the next 10 years than in the last century.

What really struck me about Duato’s talk was how critical supply chain will be in delivering this vision. He referred to supply chain as the connective tissue between R&D, commercial, customers and suppliers, which is becoming increasingly important as J&J shifts to delivering more patient-specific, gene-based therapies. Duato also expressed a high degree of respect for supply chain as a function and, more specifically, Kathy Wengel as its longtime leader at J&J. That feeling really comes through in the photo below of them waiting to join me on stage for a fireside chat session.

Here are some key takeaways from keynotes and group discussions at this year’s event:

On the rising influence and accountability of the supply chain organization and leader:

  • Leaders are contributing to top line growth by unlocking commercial innovation and helping set customer allocations where supply is highly constrained. When combined with supply chain’s traditional ownership of significant corporate costs, the organization is influencing earnings now more than ever.
  • Some industries are driving progress on large ESG and broader business issues through precompetitive consortia (NGOs are stalling). Individual companies in these consortia lead on different issues. Open sourcing critical technologies is required to scale and make progress for the planet.
  • There is a massive opportunity to drive standards across industries for greater impact. This was frequently raised in the context of sustainability, but likewise in other areas such as supplier cybersecurity.

On driving growth in a risky environment:

  • Some businesses are moving beyond having Supply Chain “at the table” and are starting to put it at the center of their go-to-market strategies.
  • Customer enablement (i.e., driving growth and efficiency for customers) is the next competitive frontier beyond solid customer service and experience.
  • One leader has used its ability to manage disruption well as a competitive advantage — growing revenues by ~40% over the last two years.
  • Cyber is a tip-of-the-iceberg issue. Suppliers are the softest targets, and some criminals are ransoming customers to not hit them.

On the intersection of talent and digital:

  • One leader shared her digital transformation “battle scars.” More specifically, to scale digital capabilities you cannot: drive it centrally, make people use tools, get lost in the ROI of individual projects, be linear in approach or let the designers run without boundaries.
  • Another leader’s digital ecosystem vision is akin to the Waze app. Not for the underlying technology, but for the community converging to drive common purpose and results.
  • More mature digital players have talent/communities that bridge the business and IT.
  • Key talent transformations highlighted include specifically hiring leaders who can navigate adversity, leading with purpose and displaying radical flexibility as part of a new employee value proposition.

It was an inspiring two days together at Leaders Forum. We are excited to reconvene this esteemed group of leaders at our North American and European Leaders in Action events, scheduled for this autumn.

Stan Aronow
VP Distinguished Advisor
Gartner Supply Chain
Stan.Aronow@gartner.com

 

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