Following a few turbulent years, supply chain optimization has become a top-of-mind target across industries. A study of chief operating officers from management consulting firm Kearney and Amazon Web Services (AWS) found that resilience is a top priority for 56 percent of these C-suite executives, and eight in 10 of their companies now include resilience as a key performance indicator (KPI).
As companies seek out solutions and insights for building more disruption-proof operations, Kearney is debuting the Kearney Supply Chain Institute to promote its position in supply chain consulting.
“Our extensive experience over the last four years is making it clear: Disruptions will remain the norm going forward,” Rupal Deshmukh, associate partner at Kearney and global lead for the Supply Chain Institute, told Sourcing Journal. “Surviving and thriving requires leaders to rewire their supply chains—expanding their supply base, reshoring, injecting AI into decision-making. The issues are many and require leaders to have foresights on supply chain trends that matter to them; this is where Kearney Supply Chain Institute comes in.”
The Supply Chain Institute will raise awareness for Kearney’s content, studies, competitions and longstanding work related to supply chains, bringing them all “under one roof,” per Deshmukh. “Kearney has been a leading supply chain advisory firm for almost 100 years now,” she said. “In the last two years alone, we have published over 100 articles, white papers and journals that have helped provide insights to leaders in making their supply chains more efficient. As we looked around at the publications in the supply chain space, we saw that there was no one-stop location for C-suite executives providing supply chain foresights.”
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For more than a quarter century, Kearney has conducted the Assessment of Excellence in Procurement (AEP) study, which benchmarks the procurement practices and performance of companies with at least $2 billion in annual revenues.
Another legacy report, the Reshoring Index, charts the manufacturing operations that have returned to the United States. In the 2021 edition of the survey, 92 percent of the executives surveyed showed a positive feeling toward reshoring. Additionally, in partnership with the Council of Supply Chain Management Professionals and Penske Logistics, Kearney also conducts an annual State of Logistics study.
The institute will also promote Kearney’s Global Factory of the Year competition, which was established in 1992 with business journal Produktion. Factories are evaluated in areas such as innovation, quality and customer satisfaction.
One other Kearney collaboration that will be highlighted through the institute is The Resiliency Compass, which was developed in partnership with the World Economic Forum. This framework was created to help companies determine their level of resiliency in areas such as advanced planning tools and a diversified distribution network.
The institute will also align with Kearney’s Global Business Policy Council, which provides both thought leadership and consulting about geopolitics, economics, technology and more.
To add a different perspective, Kearney established a new board of advisors for the Supply Chain Institute who come from outside the firm: Karin Hagen-Gierer, who has senior executive experience at Unilever and Sanofi; Shelley Stewart, whose resume includes board and executive positions at companies including DuPont and Kontoor Brands; and Brian Tobey, whose resume includes executive and board roles at Microsoft and Jacuzzi.
Sourcing operations are changing. Procurement decisions historically focused heavily on costs, but the Kearney and AWS COO survey, titled “Optimism in Operations: Why COOs are the Key to Corporate Regeneration,” found that quality assurance currently comes first, with 50 percent weighing this today compared to 40 percent who indicate cost, placing pricing second. However, three years from now, they anticipate quality will still be most important (54 percent), followed by supplier diversity (50 percent), sustainability (49 percent) and available capacity (47 percent), with cost behind these at 43 percent.
Despite all of the challenges, the COOs surveyed show optimism, with about two-thirds expecting double-digit revenue growth in the next 12 months. A plurality of respondents (39 percent) expects a 10-14 percent increase. Coupled with this optimism is a strong intent to invest.
“We believe these results denote the arrival of a new era for supply chains,” the study authors wrote. “In the past, during periods of economic uncertainty, the chosen response was most often to cut costs and batten down the hatches. By contrast, today’s COOs are optimistic because they know what’s becoming possible in end-to-end supply chains.”