Gartner challenges supply chains to be sustainable, purpose-driven, and connected

In their opening keynote address for Gartner’s 2021 virtual Supply Chain Symposium/Xpo, Dana Stiffler, vice president at Gartner, and Simon Bailey, senior director at Gartner, acknowledged that supply chain managers—particularly those with front-line responsibilities—are burnt out and tired. The way out of that fatigue, according to Stiffler and Bailey, is embracing and promoting supply chain’s role in “curing” a fractured world.

Stiffler and Bailey recognized that supply chain executives and managers are grappling not only with the continuing effects of the pandemic but also with macro issues such as climate change and talent shortages.

“We’re not the first supply chain leaders to hear the scientists’ warnings, but we are the last that still have time to heed that ‘code red’ for humanity,” said Bailey, “Because without action, the sustainability of both planet and profit are threatened.” 

In response to these challenges, the two analysts provided a vision of how supply chain can help create a better future. The vision consists of three parts:

1. Pivot to sustainable profit,
2. Make purpose personal, and 
3. Build value-aligned ecosystems.

Sustainable profit

Sustainable profit, as explained by Bailey, goes beyond focusing purely on financial profit.

“Don’t let the word ‘sustainable’ point you only to environmental sustainability,” warned Bailey. “That’s a good place to start, but an incomplete definition. Our definition of sustainable profit focuses on the ‘longevity’ of your profit and on how you can make changes so that you continue to make money into the future.”

To create this longevity, supply chain managers need to be on the lookout for risks and chokepoints that might disrupt their supply chains—and profitability—in the future. They also need to look beyond cost of goods sold and account for costs that other parties that might need to bear—such as pollution from outsourced manufacturing that will need to be dealt with by the local community.

Purpose-driven

To do this work, however, companies will need to re-energize supply chain professionals that are currently feeling stressed and overworked. According to Gartner research, since the start of the pandemic, 85% of employees report having experienced a higher level of burnout.

Stiffler said that as supply chain work has evolved into becoming knowledge work, it is has become harder to find and retain quality employees. One way to work toward that goal is to engage employees and use their talents in meaningful ways, she said.

“[A supply chain executive’s] job,” she says. “Is to make clear the connections between their [employees’] hard work, the company’s objectives, and bigger and more impactful aims.”

This concept of “shared purpose” can lead to better productivity and engagement, says Stiffler. Gartner research shows a 26% improvement in workforce health when work is personally meaningful to an employee and a 50% improvement in engagement when a company takes action on social issues.

Aligned ecosystems

Finally, Stiffler and Bailey stress that it is near impossible to “go it alone” on such efforts. They say it is crucial for companies to construct “ecosystems” with outside partners—not just suppliers but also governmental and nongovernmental organizations, startups, universities, and specialists—to tackle goals such as working toward a circular economy or implementing blockchain.

Most current supplier ecosystems are often focused on improving overall efficiency and service. Gartner research indicates that prime goals for future ecosystems will be around innovation and shared purpose.