Gartner Says Supply Chain’s Value Must Surpass Cost Savings to Remain Strategic Beyond Times of Crisis

At Gartner Supply Chain Symposium/Xpo, taking place today through Wednesday in Barcelona, Gartner revealed during the opening keynote four high impact areas to focus on to create greater value, including:

• Multi-Value Contributions, where singular investments drive multiple forms of value
• Antifragility, which creates gains from uncertainty instead of merely responding to the moment
• Designed Simplicity, a user-experience approach to business transformation that seeks to enhance productivity by simplifying processes
• Artificial Intelligence (AI) and Generative AI (GenAI), the technology that can unlock new value from the workforce

“Supply chains have and will continue to be champions of efficiency and cost savings for their organization,” Tom Enright, VP Analyst in Gartner’s Supply Chain practice, shared with attendees. “We also know that the supply chain value is much more. Supply chain leaders can also deliver value in the form of supporting customer experience, sustainability, risk reduction, innovation and growth – while continuing to keep their eye on cost.”

• Define Focus Areas and Limits: CSCOs must chart a course between a narrow focus on cost reduction and a “do-it-all” approach that is destined to failure as resources dwindle and employee fatigue mounts from years of disruptions. This is achieved by confidently defining what to prioritize and communicating areas that will be focused on, and those that will be intentionally de-emphasized.

• Rethink Supply Chain Roles: Gartner recommends transitioning away from centralized or decentralized frameworks that lack nuance. Instead, consider which activities need to be integrated at the enterprise level and which should be differentiated at the business unit or segment level —both for operational and design activities.

• Identify and Deliver Multi-Value Plays: CSCOs should identify the investments that allow them to achieve multiple objectives within one initiative. Enright noted that many organizations are finding synergies with initiatives that combine sustainability and cost objectives, while others are investing in new technologies to improve customer experience, enhance their employee value proposition, and drive growth.

“Many stakeholders perceive that the worst of the supply chain crisis has receded, and CSCOs now face the prospect of being allocated fewer resources and returning to a more siloed role within the enterprise,” Enright added. “However, opportunities exist to create more business value. It is up to CSCOs to identify and prioritize those investments that will deliver simultaneous sources of value, in line with their team’s strengths and stated priorities.”

Enright continued, “For example, consider the digital transformation journey enterprises are undertaking. By helping pave the way for adoption of AI and GenAI by equipping teams with the tools and training needed and developing clear use cases with targeted goals, CSCOs will build trust and demonstrate their commitment to providing multiple forms of value to the enterprise.”