Journal of Supply Chain

Companies that use next-generation supply chain systems may expect 23% higher profits than their competitors, according to a new study from Accenture, underscoring the benefits of advanced supply chain expertise. The "Next Stop, Next-Gen" research, which surveyed 1,148 companies in 10 industries and 15 countries, demonstrated the important role that artificial intelligence (AI) and generative AI have in improving supply chain maturity.

The research identified top-performing companies, termed "leaders," that are six times more likely to apply AI throughout their supply chains. Between 2019 and 2023, these leaders outperformed their rivals by 23% in profit margins (11.8% vs. 9.6%) and 15% in returns to shareholders (8.5% vs. 7.4%).

Max Blanchet, Accenture's global strategy head for supply chains and operations, stated, "Leaders are investing extensively in advanced technologies—particularly AI and generative AI—to build the next generation of supply chain capabilities. These abilities are essential for reinventing supply networks for efficiency, agility, sustainability, and resilience."

According to the research, just 9% of companies significantly use AI and generative AI in their supply chains, but this proportion jumps to 37% for leaders. These experts anticipate benefits such as a 30% reduction in product development and launch timeframes, more sustainable product development, and better engineering resource efficiency.

Despite improvements, overall supply chain maturity remains low, with an average score of 36%. This varies by geography and industry, ranging from 22% in Mexico to 52% in Japan, and 31% in consumer products to 40% in aerospace and defence.

The global operations lead for supply chains at Accenture, 'Melissa Twining-Davis', said, "A lot of us are still managing supply chains using a combination of paper maps and antiquated GPS units. We've only just scratched the surface of next-generation capabilities like generative design, highly automated facilities, and powerful analytics. There is a huge opportunity for innovation ahead.

To stay competitive, the report highlights that businesses must modernise their supply chain capabilities. Conventional approaches, such as worldwide low-cost sourcing and specialised manufacturers in low-cost regions, are insufficient now.

"Reinventing supply chains requires the ability to monitor suppliers up to the fourth and fifth tiers in near-real-time, change production on short notice, and simulate the entire lifecycle of a product," Max Blanchet said, emphasising the urgency of the challenge. Nearly one in three organisations has supply chain maturity scores of 25% or lower, so they need to advance promptly to catch up. Otherwise, there's a possibility they won't make it in the modern industrial and commercial environment.

Based on a study of more than 3,000 supply chain executives from a variety of industries in October 2023, the "Next Stop, Next-Gen" research emphasises how important it is to implement next-generation technologies in order to promote profitability, sustainability, and resilience in the face of global issues.