Leaders determined to make supply chains more sustainable and
resilient; turning to data and new technologies to achieve
it
More than half (53%) of surveyed CSCOs say their digital
supply chain transformation will be the most significant area of
competitive advantage in the next three years
Nearly three-fourths (74%) of surveyed CSCOs say hybrid cloud
integration is crucial to accelerating and enabling the digital
transformation of supply chains
NEW YORK and ARMONK, N.Y., April 28,
2022 /PRNewswire/ -- According to the results of a new study
from IBM (NYSE: IBM) and Celonis on supply chain resiliency, Chief
Supply Chain Officers (CSCOs) recognize the critical role that
hybrid cloud, AI, process mining and execution management play in
helping them overcome the disruptions they've faced over the last
two years. In fact, 72% of CSCOs surveyed expect their processes
and workflows to be automated over the next three to five years—and
69% plan to accelerate cloud adoption to enhance real-time data
access.
The study, The resilient digital supply chain: How intelligent
workflows balance efficiency and sustainability, conducted by
the IBM Institute for Business Value (IBV) in cooperation with
Celonis and Oxford Economics, surveyed almost 500 CSCOs across
10 industries including banking, consumer products, manufacturing
and automotive. The study findings indicate that organizations are
searching for ways to modernize their supply chains by embracing
data and hybrid cloud strategies as well as prioritizing
sustainability.
"The Confluence of post-COVID-19 challenges, inflation and
supply issues, security, and sustainability has led to the most
complex operating environment in modern business. This has forced
organizations to rethink and rebuild their supply chains to be more
agile, efficient, and sustainable," said Jonathan Wright, Managing Partner, Finance and
Supply Chain Transformation, IBM Consulting. "Technology and
data-fueled automation and intelligence are key to not only
evaluating current workflows and inefficiencies, but in identifying
new opportunities as well."
The survey of CSCOs reinforced this:
The top challenges CSCOs are facing
- 80% of CSCOs said that demand volatility is a top challenge,
while 77% mentioned the increased cost of transportation and
logistics.
- Cost aside, 76% cited the availability of transportation and
logistics as a top challenge.
- These challenges lead to missed opportunities: 71% said lower
inventory for raw materials and finished goods has led to
stock-outs and lost sales. And 60% have had to expedite products
for customers, leading to higher transportation costs.
Hybrid cloud, execution management, AI and automation can
help CSCOs seize opportunities
CSCOs are pursuing aggressive data-backed strategies to build
smarter, more agile supply chains that can help improve resilience
and sustainability. In fact:
- Almost nine-in-ten (87%) CSCOs are implementing execution
management and 77% are implementing process and task mining to
modernize their operations.
- By 2025, 83% of CSCOs plan to introduce AI-enabled real-time
inventory management.
- 74% of CSCOs say hybrid cloud integration is crucial to
accelerating and enabling the digital transformation of supply
chains.
- 81% are looking to AI-enabled processes and workflows for
real-time demand sensing.
- Some 72% expect most of their processes and workflows to be
automated in the next three to five years, while 27% expect their
workflows to be AI-enabled in the same timeframe – increasing to
33% by 2030.
Putting sustainability over profit
66% of surveyed CSCOs said sustainability is a core element of
overall business value. More than half (51%) of CSCOs surveyed said
they would be willing to sacrifice profit—on average 5% to improve
sustainability outcomes—equating to $22bn for US Fortune 500 companies in one
year.
To that end, CSCOs identify several specific actions they plan
to take over the next three years in pursuit of circular economy
goals:
- 47% are initiating full lifecycle design of their materials and
products to expand re-use of materials and reduce waste.
- 44% plan to improve energy efficiency of their products and
services.
- 35% plan to develop new products and services based on
renewable energy componentry, and 30% expect to engineer new
zero-waste products and services.
The top three expected benefits of sustainability initiatives
were: complying with environmental regulation, reducing
reputational risk, and driving new innovation areas. These gains
cannot be realized without a meticulous process of monitoring a
distinct set of sustainability targets. Some 55% of CSCOs said in
the next three years they expect to incorporate real-time
monitoring and reporting on environmental and social
sustainability. In fact, the SEC recently proposed a rule change
that would require public companies to disclose climate change
risks to their business, which, if passed, could accelerate the
need for operational climate change data.
"Eliminating inefficiencies from core supply chain processes
represents an enormous opportunity for reducing carbon emissions at
scale," said Janina Nakladal, Global Director of Sustainability at
Celonis. "Chief Supply Chain Officers know they need to adapt, and
in many cases are, but they often don't have the insight they need
to truly understand where changes need to be made—and lack the
toolset to drive the change. Our research shows that
currently-available technology—process mining and hybrid clouds—can
give CSCOs this insight to wholly transform their supply
chains."
The study revealed that CSCOs can take actionable steps to
develop and operate data-informed and sustainable supply chains.
These steps include:
- Explore new business models that amplify resiliency –
deploy AI and machine learning to allow better pattern recognition,
workflow optimization and solution gathering. Also rely on an open,
secure, hybrid cloud model to smooth and speed extended intelligent
workflows.
- Invest consistently in the near- and long-term potential of
automation – develop robust AI and automation capabilities to
speed insights and decision making. Leverage co-creation,
co-execution and cooperation to accelerate idea development.
- Make sustainability one of your most important business
priorities – operationalize a full set of ESG initiatives and
mine data across your supply chain processes.
Methodology
The IBM Institute for Business Value, in collaboration with
Celonis and Oxford Economics, surveyed 500 Chief Supply Chain
Officers across industries to gain an in-depth understanding of how
recent disruptions in global supply chains are affecting their
short-term tactics, longer-term strategies, and performance. 10
industries are represented: banking, consumer products, healthcare,
electronics, telecommunications, insurance, industrial products,
manufacturing, automotive, and life sciences, each comprising
5%-15% of our total sample.
About IBM Institute for Business Value
For two decades, the IBM Institute for Business Value has served
as the thought leadership think tank for IBM. What inspires us is
producing research-backed, technology-informed strategic insights
that help leaders make smarter business decisions. From our
unique position at the intersection of business, technology, and
society, we survey, interview, and engage with thousands of
executives, consumers, and experts each year, synthesizing their
perspectives into credible, inspiring, and actionable
insights. To stay connected and informed, sign up to receive
IBV's email newsletter at ibm.com/ibv. You can also follow
@IBMIBV on Twitter or find us on LinkedIn
at https://ibm.co/ibv-linkedin
About IBM
IBM's extensive portfolio of AI software can help organizations
take a 360-degree approach to operationalize sustainability efforts
across their business – such as extending the life of physical
assets, creating more efficient and resilient supply chains,
understanding the impact of climate on business operations, or
analyzing and reporting on ESG data and initiatives. These
solutions are underpinned by environmental insights, operational
data, and AI – transforming data into insights that drive smarter,
more sustainable decisions every day. To learn more about these
solutions including IBM Environmental Intelligence Suite, IBM
Maximo Application Suite, IBM Supply Chain Intelligence
Suite, and Envizi, visit ibm.com/sustainability
About Celonis
Celonis reveals and fixes inefficiencies businesses can't see,
enabling them to perform at levels they never thought possible.
Powered by its market-leading process mining core, the Celonis
Execution Management System provides a full set of platform
capabilities for business executives and users to eliminate
billions in corporate inefficiencies, provide better customer
experience and reduce carbon emissions. Celonis has thousands of
implementations with global customers and is headquartered in
Munich, Germany and New York City, USA with more than 20 offices worldwide.
© 2022 Celonis SE. All rights reserved. Celonis, Execution
Management System, EMS and the Celonis "droplet" logo are
trademarks or registered trademarks of Celonis SE in Germany and other jurisdictions. All other
product and company names are trademarks or registered trademarks
of their respective owners.
Media Contacts:
IBM
Lauren Nowicki
IBM External Relations
Lauren.nowicki@ibm.com
Celonis
Faiz Mandviwalla
press@celonis.com
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