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NEXT-GEN TECH BOOSTS PROFITABILITY Looking for a way to increase profitability? Technology may hold the key. Companies with advanced supply chain capabilities enjoy 23% greater profitability compared to their peers, finds new research from Accenture. These forward-thinking companies, which are six times more likely to utilize AI and generative AI throughout their supply chains, manage to generate significant additional business value. Accenture’s report, Next Stop, Next-Gen , identifies the top 10% of companies, referred to as “Leaders,” as achieving 23% higher profit margins and 15% better returns to shareholders between 2019 and 2023. Leaders invest heavily in sophisticated technologies, enabling them to develop and launch new products faster, create eco-friendly products, and significantly improve engineering efficiency. Despite this, the report paints a concerning picture of overall supply chain maturity, which remains low at an average score of 36%. Companies with low supply chain maturity scores, particularly below 25%, face significant risks if they fail to evolve and adapt. The research emphasizes that most companies still rely on outdated supply chain methods, which leaves them vulnerable in today’s dynamic economic landscape. “To remain competitive, companies must quickly adopt advanced capabilities such as real-time supplier monitoring, flexible production adjustments, and comprehensive lifecycle simulations,” says Melissa Twining-Davis, Accenture’s global operations lead for supply chains.
CROWDSTRIKE STRIKES THE SUPPLY CHAIN When a CrowdStrike update in July caused a massive IT outage, crashing millions of Windows systems and disrupting air travel and other sectors, logistics professionals waited to gauge the supply chain impact. While a fix to the CrowdStrike outage was deployed in just hours, the incident highlighted the cascading effects that technological disruptions can have on global logistics and business continuity. Two experts share their thoughts on lessons learned for the transportation and logistics sector: Transportation must implement multiple layers of redundancy for critical systems such as booking, scheduling, and communications platforms. Use multi-vendor solutions for clustered servers. Ensure that essential functions can continue offline or with minimal IT support, such as manual check-ins and reservations. Transportation personnel should be trained to switch to this mode if necessary. There is a need for DRP plans that include scenarios for large-scale IT failures.” —Mike Walters, President and Co-founder, Action1 Over-reliance on several key vendors in corporate IT highlights a broader need for supplier diversification. It goes beyond infrastructure technology into customized and high-performance components and services where single, sole, or dominant sources create consequential bottlenecks. Supplier diversification is much easier said than done, since it involves a risky and expensive process of developing a new product or service. These additional costs and risks are often dwarfed by a revenue, performance and reputational hit originating in a key supplier failure.” —Andrei Quinn-Barabanov, Supply Chain Industry Practice Lead, Moody’s “ “
“Leaders” invest more in advanced supply chain capabilities.
57%*
4.1x
4.0x
37%*
14%*
9%*
Others
Leaders
Others
Leaders
Share of companies that use more than 5% of annual revenue to invest in supply chain and manufacturing digitization
Share of companies that plan more than 5% of annual revenue to invest in industrial automation
*Note: The number represents the percentage of Leaders and Others from the overall group in the study Source: Accenture Supply Chain & Operations Capabilities Global Survey, 2023
August 2024 • Inbound Logistics 17
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