Constructing the Future: A Deep Dive into the ‘Building the Supply Chain of the Future’ Report

by Editorial Team

Explore the future of supply chains as we delve into BCG’s 2023 report, ‘Building the Supply Chain of the Future.’ Learn about the challenges, trends, and strategies that are shaping the future of supply chain management.

Boston Consulting Group’s 2023 report, “Building the Supply Chain of the Future,” provides a comprehensive exploration of the challenges, trends, and strategies that are shaping the future of supply chain management. This article aims to summarize the key findings of the report and provide insights into how companies can navigate the evolving landscape of supply chain management.

The report emphasizes that building a supply chain of the future is a process of continual upward growth. Companies are at different stages of development, ranging from stagnating to future-built. The stages are based on a weighted average of six key attributes: strategy and leadership, employee value proposition, tech and data platform, innovation-driven culture, agility and resilience, and AI deployment.

One of the key challenges identified by the report is the ability to absorb supply chain shocks and recover quickly from disruptions. The report presents a quadrant analysis showing that only 5% of companies have high maturity in both absorption and recovery rates. This highlights the need for companies to build resilience into their supply chains.

The report also highlights the importance of digital transformation and AI in building the supply chain of the future. Leading companies are rapidly adopting various generative artificial intelligence (GenAI) applications for use cases throughout the supply chain. These applications range from supplier knowledge base and search engine to pregeneration of new scenarios and schedules to simplify job optimization.

A case study of a large European steel manufacturer illustrates how companies can adjust planning and production to meet more volatile demand. The company used a digital twin to understand short-term supply chain risk, avoid congestion and service problems, and optimize inventory. Agile teams shortened decision paths and created cross-functional transparency on risks and opportunities.

The report also underscores the growing importance of sustainability in supply chain management. External pressures, such as regulations, consumer expectations, investor preferences, and environmental changes, are forcing companies to prioritize environmental sustainability. For instance, 73% of global consumers say they will alter buying habits to reduce environmental impact, and $53 trillion in global assets under management is estimated to be allocated to ESG investing by 2025.

In conclusion, the “Building the Supply Chain of the Future” report reveals a future where supply chains are continually growing and evolving. Companies must undergo digital transformation, build resilience, and prioritize sustainability to navigate this future successfully.

As we move towards this future, what strategies is your organization implementing to build a resilient and sustainable supply chain? How are you leveraging digital transformation and AI in your supply chain management? We invite you to share your thoughts and experiences in the comments below.

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