Supply chain executives significantly overestimate stakeholder trust in their supply chain capabilities and intentions, according to a new Deloitte Insights survey.
"The supply chain trust gap is far bigger than our responding executives seem to realize, suggesting there are blind spots in key areas their customers care about," says James Cascone, a Deloitte Risk & Financial Advisory partner and sustainability, climate and equity leader, Deloitte & Touche LLP. "From the customer perspective, many COVID-19 pandemic-era supply chain challenges remain unresolved, despite improvements executives have worked hard to achieve. Unfortunately, such wide gaps in trust indicators like reliability and transparency against pre-pandemic expectations stand to worsen as new supply chain risks emerge."
From PR Newswire:
- 89% of respondents who self-identified as leading suppliers said customers trust their supply chain operations, compared to just 68% on average of roughly 500 customers who said the same.
- The gap was highest when measuring reliability in supply chains (25% gap; leading suppliers = 90%, customers = 65%), followed by humanity (e.g., treating workers, customers and other partners fairly and with respect; 24% gap, leading suppliers = 91%, customers = 67%), transparency (22% gap; leading suppliers = 85%, customers = 63%) and capability (e.g., ability to maintain operational consistency; 16% gap, leading suppliers = 91%, customers = 75%).
- Nearly half (44%) of all supply chain executives surveyed expect to experience a supply chain shock in the next 24 months as a result of various external challenges, including price volatility (46%), inflation (44%), resource shortages (e.g., labor and materials; 42% and 41% respectively), and geopolitical instability (32%).
- Executives ranked external challenges similarly across regions; however, those in North America were more likely to cite financial market instability and inflation as their primary challenge compared to Asia/Pacific (APAC) and Europe/Middle East/Africa (EMEA) where price volatility was top of mind for supply chain leaders.
"With the potential for distrust to grow amid uncertain market conditions, it's increasingly important that supply chain leaders find a way to shrink the gap," says Michael Bondar, Deloitte Risk & Financial Advisory's enterprise trust leader and a principal, Deloitte Transactions and Business Analytics LLP. "We see leading organizations working to identify and prioritize actions most likely to enhance the reliability and predictability of their supply chains — ranging from developing a digital thread to investing in other, advanced technical capabilities to help earn stakeholder trust, enhance business performance, and serve as a competitive differentiator."