Watch: Navigating Disconnects Between the CSCO and the C-Suite

Many companies remain in a pre-pandemic mode of thinking, which hinders investing in the technology needed by the modern supply chain, says Al Mendoza, U.S. supply chain and Americas practice leader at EY.

EY research has shown that in many C-suites, the supply chain is viewed solely as a cost center, not as a way to drive customer satisfaction, innovation and the growth agenda of a company, Mendoza says.

Of course, supply chain managers can do a better job of marketing their work. First, they need to measure themselves in terms of the value they present to organization. “Our research has shown that 94% of executives feel supply chain KPIs [key performance indicators] are inappropriate to talk about values,” Mendoza says. “Moreover, only 44% of supply chain KPIs really focus on the customer experience. So one of the first things that executives can do, especially chief supply chain officers, is really focus their value around a greater agenda than just costs.”

It isn’t by accident, he says, that the largest and most successful retailers focus on supply chain and the customer experience. “So it really is, how do supply chain officers drive a greater agenda than just operations?”

The research revealed another important divide: When asked what’s the potential of artificial intelligence and autonomous supply chains, about 40% of supply chain officers thought that supply chains will be highly automated, while only 25% of the rest of the C-suite thought so. “And we’re talking at a time in which there’s a lot of investment competing against each other, whether it’s in marketing, internal operations or supply chain.,” Mendoza says.

There must be discussions around digital transformation, he says. “How is it part of the customer experience? How is it enabling growth and innovation? Those are topics beyond just cost.”