Shaping a Growth Agenda

A Report from the 2018 Next Generation Operations Summit

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The complete version of this report is available as a PDF

Overview

If there’s one commonality in society, it’s the dynamic pace of innovation and change. Fueling this environment are the forces of deepening digital disruption, shifting market boundaries, and growing customer power and choice. Amidst all this one thing is certain – architecting an agile supply chain is a catalyst to shaping a growth agenda.

For chief operating officers and chief supply chain officers (COO/CSCOs), shaping a growth agenda means building supply chains that are robust enough to maintain stability and accountability, but also agile enough to offer choices and delight customers, driving growth. Progress will require a deft hand, as leaders will face fresh challenges in managing multiple business models, freeing up resources to invest in innovation, and creating new ecosystems of suppliers and partners to deliver more customer-centric solutions.

To help next-generation supply chain leaders acquire these new strategies and capabilities, Leadership for a Networked World and the Technology and Entrepreneurship Center at Harvard, in collaboration with Accenture Strategy, convened the 2018 Next Generation Operations Summit: Shaping a Growth Agenda. The summit brought together supply chain leaders to discuss critical issues defining the profession today.

During the Summit participants explored questions including: How can supply chain and operations executives work across the c-suite to shape the business and translate customer insights into a competitive advantage? What new methods enable Customer Centricity and incubate disruptive business models that will fuel future growth while optimizing the supply chain? Where can big data science and analytics, including artificial intelligence techniques such as machine learning and deep-learning, bring newfound agility and insights to operations?

This report highlights key findings from the Summit. In particular, it features several cases illuminating the role of supply chain in value creation, responding to evolving customer expectations, integrating new technology, and effective leadership strategies for innovators.

  • Peter Kraemer, Chief Supply Officer, and Elito Siqueira, Global Vice President of Logistics and Operations at AB InBev share their latest innovations to harness blockchain to build agility into their international supply chain.
  • Hans Melotte, Executive Vice President of the Global Supply Chain at Starbucks discusses their use of new products and technologies to improve client experience and product management.
  • Meri Stevens, Vice President of Strategy and Deployment at Johnson & Johnson describes the company’s embrace of personalization to create a customer-centric supply chain without sacrificing reliability.
  • Stan Deans, President of Global Logistics and Distribution at UPS articulates steps they are taking to refine supply chain fundamentals and introduce new components that must exist in the near future for e-fulfillment.

We hope this report offers new strategies, insights, and ideas to supply chain and operations leaders and their organizations as they shape a growth agenda.

A letter from the Executive Director

Dr. Antonio Oftelie, Executive Director of Leadership for a Networked World, reflects on this year's summit and it's implications.

Read his letter here. >

“The starting position for any supply chain project is not actually the supply chain. It is the customer value proposition. What companies have to ask themselves is how do I go from my customer value proposition into an effective supply chain strategy without increasing complexity and while using data and analytics to improve performance?”
David Simchi-Levi
Professor of Engineering Systems, Massachusetts Institute of Technology and Chief Innovation Officer, Artificial Intelligence & Data Science, Accenture Analytics

Report Insights

  1. A Strategy for Growth at Johnson & Johnson

    In a post-Amazon world, there has been a dramatic shift in customer expectations. Consumers want more personalization, on-demand products and services, and immediate access. How can the supply chain and operations leaders of tomorrow meet these new demands while addressing a growing set of disruptors? At Johnson & Johnson (J&J), customer intimacy is a critical part of the equation. The company engages with people through some of the most challenging experiences of their life – when they have new babies, when they are diagnosed with a disease, or when they get hurt. Now as the company looks toward future growth, J&J’s Supply Chain is playing a critical role in finding new ways to bring even more personalization to its products and solutions.

  2. Balancing Core Activities and Growth Initiatives at AB InBev

    Regardless of industry or discipline, leaders successfully driving enterprise-wide transformation must develop strategies to maintain core activities while incubating, evolving, and scaling innovations. At AB InBev, Peter Kraemer, the Chief Supply Officer, and Elito Siqueira, Global Vice President of Logistics and Operations, are developing a long-term vision to connect with customers and exploring how the future of supply chain can enable that. AB InBev’s Disruptive Growth Organization (DGO) tests new innovations and then determines how effective new approaches, strategies, tools, and techniques are brought back to the company through larger scale pilots. At the same time, they are tenaciously ensuring that their core activities remain strong and consistent.

  3. Enabling Innovation to Drive Growth At UPS

    In the past, supply chains and operations were typically very linear. With increased uncertainty and complexity, today’s operations leaders have had to become even more forward-leaning and thinking, particularly in planning for the future of last mile delivery. UPS is taking steps to refine supply chain fundamentals and introduce new components that must exist in the near future for e-fulfillment. Through the use of the right data, analytics, and automation to enhance inventory optimization and transportation movements, UPS is finding new ways to grow, with the supply chain helping to drive that growth.

  4. Growing by Delighting Customers at Starbucks

    In this digital era, chief operating officers and chief supply chain officers have an unprecedented opportunity to harness new business models and be on the forefront of enterprise growth. Yet realizing the potential of emerging ideas is often difficult. What does this journey look like for supply chain leaders striving to break through barriers and leverage new business models to elevate the customer experience and increase enterprise value? At its core, Starbucks, the number one purveyor of coffee in the world, is and always has been, about creating the Third Place Experience, a place where all are welcome; a place to connect with one another over a cup of coffee. To accomplish this, Starbucks aims to create the best experience possible for its customers around the world, and this is integrally connected to the supply chain and operations of the company.

“We have to think about what we can do from an operating systems standpoint. How can we scale faster? How can we use data and analytics better? It’s an end-to-end perspective.”
Cornelia Coles
Vice President, Operation System-Product Supply Execution, Johnson & Johnson

Summary

For chief operating officers and chief supply chain officers (COO/CSCOs), shaping a growth agenda means building supply chains that are robust enough to maintain stability and accountability, but also agile enough to offer choices and delight customers, driving growth. Each supply chain team featured in this report has their own unique approach to making this happen, but there is one universal lesson: supply chain teams that are willing to do the hard work of building resiliency into their systems become growth leaders in their organizations.

Supply chain leaders have to ask themselves tough questions, such as – how are resources being used now? What is the most effective way to use them in the future? How can we free up time and budget to focus on innovation? What can we learn from other industries? How can we bring in vendors and make them partners? What do our anchor customers say?

Once the answers are in, leading change may be difficult. The successful supply chain teams of tomorrow spend time today working hard to change their culture in addition to changing the way they do business.

Customers expect on-demand, bespoke products and services, delivered reliably. In order to do that, supply chain practitioners will have to rethink their business models and in some cases their core systems. Leading global corporations like Johnson & Johnson and Starbucks have done this work – creating individualized supply chains to deliver anything from knee replacements to your favorite flavor of cake pop. The result has been happier vendors and customers. In the case of UPS, the supply chain team is working with its chief competitor – Amazon. The company is now a vendor partner with Amazon, which has unlocked new areas of growth for the logistics company. Finally, at AB InBev the supply chain team explored new ways of creating global efficiencies through regionalization and the use of data analytics.

To succeed today, supply chain professionals have to reimagine what it means to deliver products and identify ways to create new value by relying on network thinking and being willing to take calculated risks. By putting the customer at the center of supply chain transformation organizations can build systems that respond to current demand while also anticipating future needs; change management will be critical here – but the end result can be a more resilient and dynamic organization.

The Executive Leadership Group

Leadership for a Networked World, and the Technology and Entrepreneurship Center at Harvard would like to thank the Executive Leadership Group for their vision and ideas that aided the development of this Summit.

Stan Deans
President of Global Logistics and Distribution
UPS
Marc Engel
Chief Supply Chain Officer
Unilever
Peter Kraemer
Chief Supply Officer
ABInBev
Hans Melotte
Executive Vice President, Global Supply Chain
Starbucks
Colin Nelson
Chief Supply Chain Officer
Walgreens Boots Alliance
Meredith Stevens
Vice President, Strategy & Deployment
Johnson & Johnson
  

In Collaboration with

Accenture Strategy operates at the intersection of business and technology, combining deep industry expertise, advanced analytics capabilities and human-led design methodologies that enable clients to act with speed and confidence. By identifying clear, actionable paths to accelerate competitive agility, Accenture Strategy helps leaders in the C-suite envision and execute strategies that drive growth in the face of digital transformation. For more information, follow @AccentureStrat or visit www.accenture.com/strategy.

Hosted by

Leadership for a Networked World’s applied research, student innovation challenge, and on-campus summit programs are an initiative of Dr. Antonio M. Oftelie, Innovation Fellow at the Technology and Entrepreneurship Center at Harvard (TECH), part of the Harvard John A. Paulson School of Engineering and Applied Sciences. TECH is a hub for students, faculty, alumni, and government and industry leaders to learn together, collaborate, and innovate. LNW accelerates these efforts by connecting leaders across sectors and developing cutting-edge thought leadership on innovation and organizational transformation.

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