Organizations Eye Circular Supply Chain Design
October 13, 2020
chains are in the middle of an evolution that will change completely how chief
supply chain officers (CSCOs) organize and operate their organizations.
“CSCOs are tasked to design a supply chain organization that fits into this new
era,” said Mike Burkett, distinguished vice president analyst with the Gartner
Supply Chain practice. “While in the past, a good supply chain was efficient and
powerful, it must now be agile and fast.”
Gartner analysts discussed the key issues facing CSCOs during the Gartner Supply
Chain Symposium, EMEA, taking place virtually through today.
The three macro trends that will shape the future of supply chain include:
The Rise of Digital Business
Gartner research shows that many CSCOs struggle to create a holistic digital
supply chain roadmap. At the same time, they are under pressure from CEOs who
want to make their business more digital.
“Given the critical role of supply chain in ensuring customer satisfaction and
experience, much of the digitalization efforts will be on the shoulders of the
CSCO,” Mr. Burkett said. “This is the greatest transformation of supply chain
structures in a long time, and it will not be easy.”
According to Gartner research, the top barrier to a digital supply chain today
is culture, followed by legacy tech, usable data and legacy processes. CSCOs
must work with partners across the business to overcome those barriers and
enable their CEO’s digital business ambitions.
New Competitor and Trade Uncertainty
recent years, uncertainty has been a constant in supply chain. There is
uncertainty on where the next competitor will come from and what their impact
will be. Almost half of CSCOs believe that their business is at risk of being
disrupted in the coming years, with the greatest risk coming from nontraditional
businesses such as startups.
Then there is the trade uncertainty, caused by events including the U.S.-China
trade war and Brexit. More recently, the COVID-19 pandemic has raised concern
about future pandemics, after shutting down global supply chains and trade
“The ongoing uncertainty calls for a new approach to supply chain management,”
Mr. Burkett added. “CSCOs must build more flexible and resilient networks that
can respond effectively to global shocks and disruptions – be it caused by
nature or a competitor.”
Sustainability and Circular Economy
A circular economy is an economic model that separates the ability to achieve
economic growth from the consumption of natural resources. Supply chain plays a
critical role in every part of the cycle: make, use, return, recycle, reuse.
The 2019 Gartner Future of Supply Chain Survey found that 28% of organizations
had already implemented circular design approaches in their innovation strategy
– and 39% planned to do so within the next two years.
“A supply chain that enables the circular economy has to have strong reverse
logistics capabilities. The heavy equipment and machinery industries are already
on a good path. However, this is a trend that no industry can miss out on –
including consumer products,” Mr. Burkett concluded.