Accenture: Innovative tech boosts profitability and resilience of supply chains

Companies with the most mature supply chains are 23% more profitable on average, according to research from Accenture, which analyzed companies that had revamped their supply chains with generative AI, machine learning, and other innovative technologies.
The researchers surveyed senior executives in over 1,000 companies globally. Their analysis found that the ‘leaders’ – the 10% of companies that had the high level of maturity in their supply chains – have been earning significantly higher margins than their peers since 2019.
These supply chain ‘leaders’ are companies that leverage innovative automation technology to make decision-making more efficient. These innovative AI and machine learning tools also help companies run advanced simulations and implement continuous improvements.
The overall maturity score for the companies surveyed was low at just 36%, indicating that a large number of companies still have a long way to go in their maturity journey. Three in four companies lack any sort of advanced or next generation supply chain capabilities.
“Leaders are investing heavily in increasingly sophisticated technologies – especially AI and generative AI – to build the next generation of supply chain capabilities,” said Max Blanchet, Accenture’s global strategy lead for supply chains and operations.
“These capabilities are essential in reinventing supply chains for efficiency, agility, sustainability, and resilience. They enable leaders to move beyond traditional supply chain drivers consisting of cost, quality, and delivery, which are causing many supply chain vulnerabilities and inefficiencies.”
Remaining competitive
Companies need modern supply chain capabilities to stay competitive in today’s unpredictable economy. Relying on traditional strategies, like low-cost global sourcing and specialized factories in cheap locations, is no longer enough.
And if boosting supply chain resilience is so important, one thing is clear: Adopting and scaling these capabilities is only achievable with significant investment into supply chain automation.
On average, companies across different industries are investing around 7% of their revenues on supply chain resilience. That comes in the form of both industrial automation at plant sites as well as supply chain and manufacturing digitalization, which each make up around half of that 7% investment.
“Reinventing supply chains requires the ability to, for example, monitor suppliers up to the fourth and fifth tier in near-real-time to anticipate risks, change the production on short notice, and simulate the entire lifecycle of a product,” said Blanchet.
“Companies with supply chain maturity scores of 25% or lower – almost one in three companies – must act fast to catch up. Otherwise, there is a real risk they won’t survive in today’s new economic and industrial context.”
Resilient supply chains have become a top concern in a wide range of industries around the world since the worrying rise in supply-side problems owing to the Covid-19 pandemic, damaging inflation, and geopolitical instability. These problems will continue to cause major headaches in the near term and companies that avert getting tangled in a mess are certain to have an advantage over the competition.