Gartner Highlights CSCO Offset Strategies

June 14, 2022

To ensure future success and achieve competitive advantage, chief supply chain officers (CSCOs) must prepare offset strategies for five key challenges brought about by accelerating change.

In the opening keynote at the Gartner Supply Chain Symposium/Xpo, taking place here through Wednesday, Ken Chadwick, vice president analyst with the Gartner Supply Chain practice identified the five focus areas as: cognitive overload, customer experience, energy instability, technology change and supply chain cyber risk.

“Offset strategies are a proven way to shift the competitive landscape by applying unconventional or untried approaches to leverage individual strengths,” said Chadwick. “If the offset strategy focuses on the most critical matters of our time, supply chain leaders can reap immediate rewards.”

“It was interesting to hear Ken Chadwick at the Garter Supply Chain Symposium this past week talking about offset strategies for supply chain executives, said Scott Deutsch, President for EPG Americas. “I found his take on the cognitive overload to be on target, after what so many have been through these past two years as an excellent barometer for businesses in general. Businesses and logistics people are still catching their breath and the changing landscape about work from home, the hybrid approach or the get back to the office or else approach is going to be quite the challenge for businesses in the next 12 months as they balance between customer satisfaction and worker satisfaction. I will not be surprised if we see some interesting Harvard Business School case studies result from many of these decisions.”

The five important challenges when designing an offset strategy include:

Cognitive Overload

The pandemic, its resulting supply chain disruptions, and the shift to remote and hybrid work models increased the complexity of work and changed collaboration and decision-making which made many employees feel overwhelmed. Instead of adding more complexity to the situation, supply chain leaders should aim to simplify how work is done.

“We’ve seen great successes with constrained decision-making. This model deliberately reduces the number of people involved in a decision and the time people have to gather information and make the decision. CSCOs can also outsource some decision-making to artificial intelligence,” Chadwick added.

Customer Expectations

To offset rapidly evolving customer needs, supply chain leaders must shift from a “Just in Time” mindset that primarily focuses on internal cost and efficiency goals, to a “Just the Customer” mindset, focusing externally on customer needs. This shift will provide supply chains the opportunity to reposition its commercial contribution to the business to one that delivers both optimization and drives business growth.

Energy Instability

Disruptive events, such as the Texas ice storm in 2021, showed that relying on a singular supply of energy can cause failure. Humanities’ need to consume energy is also having an impact on the environment. One way for CSCOs to address this challenge is to enable distributed, sustainable energy management, where the power demand of factories, fleets and other parts of the value chain is supplied by a distributed network consisting of renewables, micro grids and battery storage.

Technology Change

According to Gartner research, the biggest challenge facing supply chain leaders in the technology space is not necessarily the technology itself. It is embracing and adapting to new technologies and envisioning new ways of doing business. That’s why CSCOs must be at the forefront of change and inspire their employees to use and trust the next generation of technology.

Supply Chain Cyber Risk

Gartner research has found that over 80% of companies experienced a significant cyber security incident in the last two years. This development is driven by connected technology networks and cyber-physical systems, such as sensors and smart vehicles. Supply chain leaders can react to this evolving risk by partnering with the chief information security officer to build a cyber security framework.

“CSCOs cannot control if, or when, they get hit by a cyber-attack. What they can control are their own decisions on investments and actions. Supply chain leaders must realize that cybersecurity is not just an IT issue. It includes making decisions on partners, conducting realistic risk assessments and integrating a cybersecurity perspective into everything they do,” Chadwick concluded.

“The way that we do business is very different now than how it was before the pandemic. With the shift to a work-from-home model came new cyber risks we have to be aware of. Employees need ongoing education on how to stay safe online, including the deployment of Multifactor authentication, the use of private Wifi connections, and higher alertness towards threats like phishing emails”, says Rajeev Gupta, CPO at Cowbell Cyber. “Additionally, every business, no matter the size, should have a standalone cyber insurance policy as a safety net to fall into should a cyber incident happen.”

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