Leading the Decade:

Creating and Sustaining

Excellence in the Supply Chain

Debashis Tarafdar
Research Director, Supply Chain

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© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
“If the rate of change
on the outside
exceeds the rate of
change on the inside,
the end is near.”
JACK WELCH
Former CEO, GE

2
 Changing Business Realities
New Global Geographies Globalized Networks

Future 
Customers

Volatility and Disruptions Business Transitions 
© 2014 Gartner Inc. All rights reserved.
Future Customers….Huge Opportunity

Would pay more for a better 
86% customer experience 

Would expand purchases by 10% for 
73% superior customer experience

Would recommend companies that 
58% deliver superior customer experience

© 2014 Gartner Inc. All rights reserved. Source: Harris's "2011 Customer Experience Impact Report“, Strativity's "2010 Customer Experience Consumer Study"
Digital Business

Physical Digital

What is Digital Business? 
Digital Business is the creation of new business designs reached by 
blurring the digital and physical worlds. It connects people, businesses 
and things to drive revenue and efficiency.
 Digital World….Digital Life

• Look at mobile ‐ 150 times a day….every 6.5min
• Sleep with mobile ‐ 66% people
• Smartphones sold /day  > Babies born /day 
- Overall ‐ 3 smartphones – 1 Baby 

• Data generated /day in 2013 > total data generated 
till 2003
• Social networks participation‐ 89%.... 58% use daily

Source‐ Mary Meeker, May 2013, source, Time Poll, Luke Wroblewski Jan 2012
 Exploding Growth of Physical ‘things’

7
© 2014 Gartner Inc. All rights reserved.
 The Journey Onward — to Digital Business

Pre Web
E- Post Nexus

Analog Web business D-marketing D-business

Static Traditional Going to Blurring

Traditional
Focus Web Business the Physical &
Business
Presence Goes Online Customers Digital

Entities
People People Business People Business People Business

Sensors
EDI Mobile
Technologies ERP CRM 3D printing
BI Big data
CRM Web Smart
Portals Social
Machines
Q3. Which level
best describes 3% 31% 15% 31% 20%
your N = 74
organization's Industries with physical supply chains

business today? Source: Survey Analysis: CSCOs Must Ensure Digital Business Leaders in
Manufacturing Don't Underestimate the Supply Chain Impact , Gartner, 2014

8 © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Today: Digital Business is Emerging
Across Industries to Deliver Outcomes
Expand Consumer Choice
Downstream data and digital marketing 
with data captured for demand and 
innovation 

Deliver Patient Outcomes
Improve patient health using remote 
diagnostics to tailor therapy based upon 
needs 

Maximize Farmer Yield
Platform integrates seed science, field 
science, data analysis & partner precision 
equipment
The Notable Trends from Last Year

Understanding and A Convergence of Supply Chain as

Supporting the Fully Digital and Physical Trusted and
Contextualized Supply Chains Integrated Partner
Customer Delivering Total
Customer Solutions
 Supply Chains Are Transforming 
Traditional Sequential Supply Chains

Demand Driven Value Networks

The Goal of Supply Chain:
Orchestrate a Profitable 
Perfect Order that is 
Sustainable

© 2014 Gartner Inc. All rights reserved.
Supply Chain Needs to Have a Seat at Top Management

CEO

COO CIO

CSCO CMO

CFO R&D

Legal HR

© 2014 Gartner Inc. All rights reserved.
 Level of SC performance
Q01. Compared to peers in your industry, how would you rate your organization’s overall level of supply chain
performance?

n=390

We
consistently
outperform the
We are at a
market and our
disadvantage
industry peers
12%
to our industry 2013 Study
peers n=449
18%

Leaders Below
We have a 12% average
modest 13%
advantage
over our
industry peers Above
We have parity average
33%
with our 34% Average
industry peers 41%
37%
 It is a Journey…
Orchestrating

Demand Outcome
Enterprise Supply
Collaborating Enterprise
Network Outcome
Outcome
Customer Value Enterprise Outcome
Product
Outside‐In Demand Supply

Product
MINDSET

Integrated
Internal Result
DemandFunction Supply
Function
Integrated Supply Chain
Function
Product

Anticipating
BU BU BU

Inside‐Out Function
Function
Function
Function
Function
Function
Reacting
BU
BU
BU

Cost TARGET Service

14
SC maturity – Still 64% of companies are in Stage 1 or 2

Business outcome focus Use of metrics Business process focus

Level 5 Level 5
6% 3% Level 5
Level 1 Level 1 Level 1
15% 5% 20%
13%

Level 4
Level 4 Level 2 Level 2
14% Level 4
16% 26% 40%
14% Level 2
27%
Level 3
Level 3 Level 3 34%
37% 30%

n=390 n=390 n=390

Decision making practice Use of technology SC MATURITY LEVEL

Level 5 Level 5
4% 4%
Level 1 Level 1 Level 5
17% 17% 0.3% Level 1
Level 2 20%
Level 2
Level 4 32% 26%
Level 4
16% Level 4
5% Level 2
14%
44%

Level 3 Level 3
Level 3 39% 30%
31%
n=390 N=390 n=390
 SC business goals, changes year to year
Agreement statements (production readiness)
Q02. Thinking of your supply chain organization’s business goals for 2015, what do you expect will be the top three business priorities for you
supply chain organization?

2012 2013 2014 2015 Rank

(48%) (53%) Process improvement (49%) 1

(42%) (52%) Efficiency & productivity (42%) 2

(38%) (45%) Cost reduction (40%) 3

(36%) (39%) Leveraging SCM to drive growth (39%) 4

(34%) (37%) Customer service/ new customer (36%) 5

(31%) (18%) Process innovation (22%) 6

(26%) (18%) SC talent (19%) 7

(14%) (16%) End-to-end cycle time (16%) 8

(13%) (11%) Forward looking decision making (13%) 9

SC talent SC talent (9%) Business continuity/ risk/security (8%) 10

Decision making Decision making Decision making Corporate/SC sustainability (7%) 11

Production flexibility Production flexibility Production flexibility Production flexibility (6%) 12

Not asked Not asked Not asked

BASED ON SUM OF TOP 3/ EXCEPT 2012 PRIORITIES DIFFERENT QUESTION FORMAT/ %S NOT COMPARABLE
 Top 3 SC initiatives for each SC goal
Q03A. For each of your top three priorities select the most important initiative that has been or will be put in place to achieve that
priority.
Improved SC Advancing maturity of
visibility/transparency your S&OP [Top 3 initiatives for each SC business goal]
Enhancing visibility into manufacturing
capabilities to match supply with demand
Asset & Inventory optimization
Improved SC visibility and #1 SC network redesign
transparency
Enhancing decision making with BI #1
& analytics Other Supplier collaboration,
6% segmentation
Advancing maturity of your S&OP #1
Reduce costs
Recruiting, training & talent 17%
management
#1 SC network redesign
Advancing maturity of your S&OP
#1
Top
With BI and analytics Decision making
#1 5% Supply Leveraging SCM Enhancing decision making with
Improved SC 16% BI & analytics
visibility/transparency Chain
Business process
improvements
Goal
Enhancing visibility into manufacturing
capabilities to match supply with demand 14% Customer collaboration,
Customer service segmentation & service
15%
Enhancing decision making with
BI & analytics
#1 Efficiency/Productivity #1 Customer collaboration, segmentation
Improved SC visibility and 14% & service
transparency

Improved SC visibility and Globalization initiatives

transparency #1

SC network redesign Improved SC visibility and

transparency
Asset & inventory optimization
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Top obstacles
Q04A. What do you consider to be the top three obstacles to achieving your organization’s supply chain goals and
objectives?

n=390 Changes to
Top Obstacle 2nd 3rd SUM previous
year
Difficulty or inability to coordinate and synchronize end- 42%
12% 16% 13% -3%
to-end supply chain processes
42%
Forecast accuracy and demand variability 17% 13% 11% -3%

36% -7%
Lack of cross-functional collaboration 13% 11% 12%

35% +3%
Lack of visibility across supply chain 13% 11% 11%

Insufficient management/leadership engagement with 31% -10%

11% 12% 8%
SCM, corporate culture
27% -
Supply chain network complexity 10% 8% 9%

25% +3%
Developing, retaining and managing supply chain talent 7% 6% 11%

Inability to effectively exploit our growing volumes of 23% new

5% 10% 7%
data to make more informed and predictive decisions
18% +1%
Supplier performance, “supply variability" 5% 6% 8%

17% -5%
Cost mitigation and control 5% 6% 6%

2% -
Other 2%0%0%
Our topics today are aligned with the key SC
Goals and Initiatives…

Customer 
Improved SC 
Collaboration /  Asset & Inventory  
Visibility & 
Segmentation &  Optimization
Transparency
Service

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Our topics today are aligned with the key SC
Goals and Initiatives…

Customer 
Improved SC 
Collaboration /  Asset & Inventory  
Visibility & 
Segmentation &  Optimization
Transparency
Service
Stan Aronow Debashis Tarafdar
James Lisica
Research VP Research Director
Research Director
Cost‐to‐serve & 
Portfolio Complexity 
Management

Supply Chain Top 25: 
Improving 
Lessons from Leaders Logistics  Performance 
Collaboration through 
Segmentation to  Benchmarking
Improve Capabilities 
and Profitability

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