As the pandemic moves further into the rearview mirror, supply chain executives may be losing the strategic gains they made with their C-suite counterparts, according to new research from Ernst & Young LLP. While 88% of supply chain executives report that their organization's supply chain plays a vital role in enhancing the customer experience by promptly addressing and meeting customer needs, their colleagues across the C-suite overwhelmingly (88%) view the supply chain function as a cost center, highlighting one of multiple gaps in perception uncovered by the study.
The EY 2024 Supply Chain Survey: Bridging the C-suite disconnect, which surveyed 347 U.S. supply chain leaders from various industries whose companies have at least $500m in annual revenue, underscores the urgent need for a shift in how organizations view and invest in their supply chains to compete and thrive in an era of growing complexity and volatility. Despite a heightened awareness of the importance of supply chains, 78% of supply chain leaders say their organization is back to focusing on supply chain cost management post-pandemic, with 28% citing cost reduction as one of the top three priorities currently, a shift from pandemic-era strategies.
"The series of supply chain shocks that started with the pandemic elevated the role of supply chain leaders in the C-suite, but executive teams are increasingly reverting to outdated views of the supply chain as a cost center rather than a growth engine," says Ashutosh Dekhne, EY Americas supply chain & operations practice leader. "Our research uncovered concerning perception gaps between supply chain and C-suite executives around the value of supply chain, the digital maturity of supply chains and the value of cross-collaboration."
Key Takeaways:
- While C-suite leaders are eager to integrate technology across the organization, they appear to underestimate the supply chain's role in this transformation. According to the findings, both sets of leaders identified modernization efforts as one of the top priorities for the future of supply chain, but while supply chain executives are more likely to anticipate their organization's supply chain will be mostly autonomous by 2030 (39% vs. 25% C-suite), C-suite leaders are more likely to say it will take an additional 10 years (i.e., by 2040) (27% vs. 12% supply chain executives). In fact, about a quarter (26%) of the C-suite believe their organization's digital connectivity with suppliers is limited to email and sharing spreadsheets, which is significantly more than supply chain executives (16%) and highlights an underestimation of supply chain's progress in digital maturity.
- Additionally, there is a notable gap in perception around the need for the supply chain to collaborate across functions and with external partners and customers, as well as the benefits greater collaboration brings to the organization. About two-in-five (39%) supply chain executives admit that one of the top challenges their organization currently faces as it relates to supply chain metrics is proving the value of cross-functional collaboration, missing out on a crucial avenue to help the C-suite better understand their impact.
