More than half of chief supply chain officers surveyed would sacrifice profit for sustainability

According to the results of a new study from IBM and Celonis on supply chain resiliency, Chief Supply Chain Officers (CSCOs) recognise the critical role that hybrid cloud, AI, process mining and execution management play in helping them overcome the disruptions they’ve faced over the past 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 organisations are searching for ways to modernise their supply chains by embracing data and hybrid cloud strategies as well as prioritising 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 organisations 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.”

Among the top challenges CSCOs are facing, 80% 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 led 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.

Of those surveyed, 66% 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 US$22 billion for US Fortune 500 companies in one year.

“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.”