New research from Accenture highlights the advantages of advanced supply chain capabilities, revealing that companies with next-generation supply chain technologies are 23% more profitable than their peers. The “Next Stop, Next-Gen” report surveyed 1,148 companies across 15 countries and 10 industries, showing the significant role of AI and generative AI in enhancing supply chain maturity.
The report identifies top-performing companies, termed “Leaders,” who are six times more likely to implement AI across their supply chains. These leaders demonstrated 23% higher profit margins (11.8% vs. 9.6%) and 15% better returns to shareholders (8.5% vs. 7.4%) between 2019 and 2023 compared to their peers.
Max Blanchet, Accenture’s global strategy lead for supply chains and operations, stated, “Leaders are investing heavily in sophisticated technologies—especially AI and generative AI—to build the next generation of supply chain capabilities. These capabilities are essential to reinvent supply chains for efficiency, agility, sustainability, and resilience.”
The report notes that only 9% of companies extensively use AI and generative AI within their supply chains, but among leaders, this figure rises to 37%. These leaders expect benefits such as a 30% reduction in product development and launch times, enhanced eco-friendly product development, and improved engineering resource efficiency.
Despite advancements, overall supply chain maturity remains low, with an average score of 36%. This varies across regions and industries, from 22% in Mexico to 52% in Japan, and 31% in consumer goods to 40% in aerospace and defense.
Melissa Twining-Davis, Accenture’s global operations lead for supply chains, remarked, “Many of us are still running supply chains on a mix of paper maps and first-generation satnavs. The next-generation capabilities that exist, such as generative design, highly automated facilities, and advanced analytics, are just at the beginning. The reinvention potential ahead is massive.”
The report emphasizes the need for companies to evolve their supply chain capabilities to stay competitive. Traditional strategies like global low-cost sourcing and specialized factories in low-cost locations are no longer sufficient.
Max Blanchet emphasized the urgency, stating, “Reinventing supply chains requires the ability to monitor suppliers up to the fourth and fifth tier in near-real-time, change production on short notice, and simulate the entire lifecycle of a product. 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.”
The “Next Stop, Next-Gen” report, based on a survey conducted in October 2023 with over 3,000 supply chain executives from various industries, underscores the importance of adopting next-generation technologies to drive profitability, sustainability, and resilience amid global challenges.
Stay current with supply chain report news at The Supply Chain Report. For international trade resources, visit ADAMftd.com.
#SupplyChain #NextGenSupplyChain #AIinSupplyChain #SupplyChainTechnology #SupplyChainNews
