Survey: Major Disconnect Between Supply Chain Executives and the C-Suite
Survey: Major Disconnect Between Supply Chain Executives and the C-Suite
The COVID-19 pandemic fundamentally altered the perspective of supply chain managers. Global lockdowns and trade wars highlighted the notion that cost should not be the determining factor in material procurement and manufacturing. Supplier diversification and the shift of production to regions closer to end markets—despite requiring greater upfront expenditure—became critical components of supply chain resilience strategy. Yet nearly five years after COVID-19 emerged, questions remain about whether supply chain managers have maintained these perspectives.
A survey of 347 supply chain leaders conducted by EY encompassed companies with annual revenues of at least $500 million. According to survey results, 88 percent of respondents stated that C-suites view the supply chain as a cost center, signaling a reversion to pre-pandemic attitudes. However, while 90 percent said that CEOs appreciate the financial impact of supply chains, 78 percent indicated that their organizations have reprioritized cost management in key decisions.
Ashutosh Dekhne, EY's Americas Supply Chain and Operations Practice Leader, noted that during the pandemic, when critical supply lines were severed, many manufacturers streamlined operations by reducing product portfolios. Now, as more SKUs are being reintegrated into the production mix, complexity is increasing, and elevated interest rates are driving higher short-term expenses. This situation can lead executives to focus on current cost pressures while neglecting preparation for future major crises.
In many companies, the chief supply chain officer—once an advocate for long-term supply and production strategies—has become the "perpetually howling wolf." While supply chain managers are viewed as having successfully restored operations, few companies are undertaking nearshoring at meaningful scale. Risk mitigation efforts come with costs that some are unwilling to bear.
The survey also reveals a perception gap regarding technology adoption. While 26 percent of C-suites (excluding CSCOs) say digital connectivity efforts with suppliers are limited to email and spreadsheets, supply chain managers reported this figure at 16 percent. Executives are approaching large investments in new systems to transform supply chain planning and execution with greater caution, demanding that such expenditures demonstrate value within shorter timeframes.
Furthermore, the survey shows a disconnect regarding the future of "autonomous" supply chains. While 25 percent of C-suites expect their operations to be largely autonomous by 2030, 39 percent of supply chain managers share this expectation, revealing that C-suites underestimate the digital maturity of the supply chain. Dekhne notes that while C-suites recognize that connected systems are important, they do not view digitalization as urgent.
Supply chain managers cite demonstrating the value of cross-functional collaboration as their greatest challenge, a situation that prevents C-suites from better understanding supply chain impact. Managers who must foster collaboration to comply with environmental regulations say their efforts to communicate more broadly with suppliers and customers fall short.
Dekhne emphasizes that supply chain strategies must move beyond cost obsession, and that supply chain managers must bridge the gap with C-suites, reclaim their seat at the table, and set direction for future innovation and expansion. Unless another major disruption occurs, senior executives may continue to overlook the importance of supply chain strategy.
Key Points:
Supply chain resilience takes center stage post-COVID-19.
According to the EY survey, 88 percent of respondents said C-suites view the supply chain as a cost center.
90 percent of CEOs appreciate the financial impact of supply chains, but 78 percent prioritize cost management.
A perception gap exists between C-suites and supply chain managers on technology adoption.
Disagreement exists between C-suites and supply chain managers on the future of autonomous supply chains.
Progress on cross-functional collaboration and digitalization remains insufficient.
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