Leading companies invest more in advanced supply chain capabilities—and get higher returns.
Scope 3 emissions represent up to 95% of a company’s carbon impact. To make improvements, organizations must forge partnerships with suppliers.
It almost goes without saying that executing across your supplier network will require strongly aligned and collaborative leadership within your own organization. The multidisciplinary, cross- functional nature of supply chains resists silo-based approaches.
If your company doesn’t have a small, senior, cross-enterprise team tasked with finding resolutions for your toughest supply chain problems, it may be time to create one. That team should draw on the company’s expertise in advanced and emerging technologies, as needed, to tackle the most critical issues facing the supply chain, and in particular the ones that can’t be resolved quickly at lower levels. Those issues might include how to rebalance the supply network to mitigate risk or reduce dependency on a given country or region—a decision that also involves cost questions, as discussed above.
Although many companies create rapid-response teams in the wake of sudden shocks, the current challenges facing supply chains call for an “always-on” cross-enterprise team. As recent research has found, managers learn from past shocks but still have difficulty preparing their operations for the next extreme disruption.
Senior leadership teams need to take steps to cascade their decisions through the organization, which provides transparency, increases the adoption of decisions, and helps the leadership team to speak with one voice.
All members of that team will need to understand the different perspectives their peers may bring to supply chain decisions and endeavor to bridge them where possible. PwC research finds, for example, that COOs and CFOs are currently more conservative in their appetite for the digital transformation investments that provide a foundation for connected supply chains. This may be due to an intensified focus on shorter-term results amid rising inflation and demand-side challenges.
Regardless of the reason for differing perspectives, the heightened importance of supply chains will require more top-team functionality and collaboration. Some companies might begin to rethink C-suite roles in a way that blurs traditional functional responsibilities. For many organizations, the work might start with redefining the role of the chief operating officer, and creating new modes of collaboration between that executive and the chief commercial officer, chief information officer, chief data officer, chief tax officer, and chief financial officer. It might be that a new supply chain role emerges in the C-suite, one that has a broader remit over the resilience of operations, customer acquisition and retention, risk, sustainability, and technology development. Regardless of the organizational preference, the supply chain imperative is, without doubt, a complex problem that requires novel solutions. No one part can be isolated from the others. That means the team at the top of your organization may need to reinvent itself.
For business leaders, the challenge of helping their companies navigate global supply shocks requires strong and steady thinking—and a recognition that there will be more crises to come. Moving smartly now can help them ensure that their supply chain organizations not only survive the current crises but get ever more resilient and oriented for growth in the future.
Partner, Strategy& Austria
Connected Supply Chain Leader, PwC US
Global Industrial Manufacturing & Automotive Tax Leader, PwC US