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Supply chains need to be reinvented for resilience

A new Accenture report, 'From Disruption to Reinvention – The future of supply chains in Europe', published at the World Economic Forum’s Annual Meeting in Davos looks at how supply chain disruptions are likely to play out across Europe. It states that supply chain challenges arising from the COVID-19 pandemic and Russia’s invasion of Ukraine could result in a potential €920 billion cumulative loss to gross domestic product (GDP) across the Eurozone by 2023. The potential loss equates to 7.7 percent of the Eurozone GDP in 2023.

The report explores three possible scenarios for how the war could play out over the coming year, modelling the impact of each scenario on the Eurozone region in terms of costs and timelines for recovery.

Reinventing supply chains in a new economic order

The report suggests that a reinvention of supply chains is required to address a paradigm shift - supply chains were designed mainly to optimize costs, while in today’s world, they must also be more resilient and agile to respond to increasing supply uncertainties, while becoming a key competitive advantage to enable future growth.

A focus on three key areas is highlighted:

  • Resilience: Supply chains must be able to absorb, adapt to and recover from disruptions whenever and wherever they occur. Improved dynamic visibility, risk identification, and mitigation solutions will enable companies to respond to sudden supply chain changes. Scenario planning and risk and opportunity analyses will help them adapt to evolving supply and demand. Network modeling and simulation, stress tests, strategic buffer sizing, and multi-sourcing options will allow organizations to manage uncertainties.
  • Relevance: Supply chains will need to be customer-centric and agile so they can quickly and cost-effectively adapt to changes in demand. Capturing new data sets, including real-time data, from inside and outside the organization and across the value chain will be critical. Automation and artificial intelligence will allow organizations to identify new data patterns rapidly to better inform decision-making. Moving from centralized, linear models of supply to decentralized networks that use on-demand production, and in some instances, bringing production closer to the point of sale, can help organizations better meet customer expectations for order fulfilment.
  • Sustainability: Modern supply chains need to support, if not accelerate, organizations’ sustainability agendas. To gain the trust of stakeholders, organizations must make their value chains transparent; one way to do this is through blockchain or similar technology.​ A shift from linear processes to closed-loop, circular processes that minimize waste will also be key.

Read the report



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