How C-suite discontent is burying progress in the risk management profession

According to a new study from Ernst & Young LLP (EY US), supply chain managers may be losing ground with their C-suite counterparts as the pandemic moves into the past.

Despite 88% of supply chain leaders saying their supply chain is critical to improving the customer experience by meeting customer needs, 88% of C-suite executives view the supply chain as a cost center. This gap in perception is highlighted in the EY 2024 Supply Chain Survey, which collected data from 347 US executives representing companies with annual revenue of at least $500 million.

The findings underscore the need for organizations to reassess the way they see and invest in their supply chains, especially in an era of increasing complexity.

While awareness of the importance of procurement has grown, 78% of supply chain leaders say their companies have refocused on cost management since the pandemic, with 28% listing cost reduction as a top priority, leaving behind pandemic-era strategies.

Ashutosh Dekhne, leader of the EY Americas supply chain and operations practice, said that although the pandemic is beginning to elevate the role of supply chain leaders in the C-suite, managers are returning to the old views of the supply chain as a cost center.

“Our research revealed about the perception gap between supply chain managers and C-suite executives about the value of the supply chain, the digital maturity of supply chains and the value of cross-collaboration,” said Dekhne.

While both groups identified modernization as a priority, supply chain leaders are most optimistic about achieving self-sufficiency by 2030, with 39% expecting this, compared to 25% of C-suite leaders.

A quarter of C-suite executives believe their organization's digital communication with suppliers still relies on basic tools like email and spreadsheets, which contradicts the more advanced vision held by supply chain leaders.

The study also revealed differences in how cooperation is valued. While 39% of supply chain executives agreed that demonstrating the value of cross-functional collaboration is one of their top challenges, this collaborative environment is seen as an opportunity for supply chain leaders to better communicate strategic value to the C-suite.

To address this disconnect, Dekhne suggested that supply chain leaders must reposition themselves by demonstrating that technology-enabled capabilities not only reduce costs but also improve competitiveness and drive growth.

Almost all supply chain leaders (97%) face challenges tracking supply chain metrics, with only 44% monitoring customer satisfaction as a key indicator. EY recommends aligning supply chain metrics with broader business objectives, including metrics that reflect contributions to customer service, responsiveness, and innovation.

In addition, supply chain leaders are encouraged to focus more on the customer experience, as 84% ​​admit they spend more time on internal operations than on customer needs. Integrating customer experience into supply chain strategies can help demonstrate a direct impact on growth and revenue.

The study also found that 80% of supply chain leaders are working to improve internal cross-functional collaboration, with 79% improving collaboration with external vendors. Research has emphasized that demonstrating these collaborative efforts can help align operations with broader business goals and improve the overall sustainability of the supply chain.

Addressing labor and skills shortages remains a top priority for supply chain leaders, and closing the digital maturity gap with the C-suite will require continued workforce development in advanced technologies. Additionally, improving supply chain visibility through data analytics and artificial intelligence will help organizations manage future disruptions, according to the EY report.

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