Supply Chain as a Service: Commercial Innovation and Profitable Growth

Supply chains must focus on driving profitable growth through commercial innovation and customer enablement, balancing operational excellence with a greater focus on commercial innovation.

### Supply Chains Driving Profitable Growth: A Gartner Webinar Summary
* 📈 Gartner's research shows that high-performing supply chains are recognized by CEOs as **critical to business success**, while low-performing ones are **losing recognition**.
* 🏆 High-performing supply chains balance operational excellence with commercial innovation, focusing on **top-line growth**.
* 🛒 Key capabilities for profitable growth include **maintaining customer satisfaction**, **promoting customer ease**, and **driving commercial innovation**.
* 💼 Commercial innovation includes "**supply chain as a service**" (SCaaS), which generates revenue by offering supply chain capabilities to **improve business performance**.
* 📊 While only **21% of organizations currently offer SCaaS**, Gartner predicts **significant growth in the next 3-5 years**.
* 🤝 Aligning supply chain priorities with CEO goals and **effectively communicating supply chain value** are crucial for success.
* 🌐 Examples of customer enablement include P&G's **data-driven recommendations to eliminate stockouts** and Castrol's **IoT-enabled lubricant replenishment service**.
* 🔮 Looking ahead, supply chains must be prepared to **manage disruptions** and **maintain customer satisfaction** in an **increasingly complex and competitive environment**.

### Supply Chain as a Service: Transforming Commercial Relationships
* 🌐 Supply chain as a service provides **visibility and optimization** across Europe, reducing transportation costs and **improving sustainability**.
* 🛒 Companies like Casserole and Johnson & Johnson are preemptively replenishing products for customers, **improving service and reducing costs**.
* 💼 Supply chain as a service is a form of outsourcing, but with a focus on **enhancing existing capabilities** rather than replacing them.
* 🏭 Medium-sized companies are seen as the **sweet spot for benefiting from supply chain as a service**, but large enterprises like McDonald's also **engage in this model**.
* 🤝 Collaboration between companies in the same industry for supply chain services can be beneficial, as long as it doesn't **compromise competitive advantage**.
* 💸 Monetizing supply chain capabilities is exemplified by companies like Woolworth Group's **Primary Connect** in Australia.
* 📊 Successful implementation of supply chain as a service requires dedicated resources, including **product managers and project managers**.
* 🚀 To start with supply chain as a service, companies should focus on **mindset change**, **communicate value**, and perform a **go-to-market strategy assessment**.

Supply Chains Driving Profitable Growth

SupplyChainBrain is the world's most comprehensive supply chain management information resource. Our videos feature industry Thought Leaders discussing fundamental supply chain principles; identifying emerging trends, strategies and best practices; and presenting forward-thinking ideas, cutting-edge solutions and the latest innovations.


SupplyChainBrain

The Role of Supply Chains in Driving Profitable Growth

Supply chains are now expected to drive profitable growth and not just focus on efficiency and cost control.

High-performing supply chains are crucial for the success of the business, but there is a disconnection between what chief executive officers prioritize and what low-performing supply chains are doing.

Many chief supply chain officers prioritize operational excellence over commercial innovation, despite the greater importance of growing the business for CEOs.

Driving Profitable Growth Through Supply Chain Optimization

Balancing operational excellence with commercial innovation is crucial for high-performing supply chains.

Customer satisfaction and ease are key factors in driving profitable growth, as they lead to loyalty and consistent repurchasing.

Commercial innovation, such as supply chain as a service, is essential for driving revenue and gaining a competitive advantage.

Gartner's Supply Chain Symposium & Expo provides a valuable opportunity to learn from experts and benefit from their experiences in supply chain management.

Supply chain as a service is a new source of revenue beyond the selling of physical products, encompassing three main types: operations, technology-based business processes, and products.

It involves offering physical operational capabilities, nonphysical operations driven processes, and a shift to a subscription or outcome-based business model.

The concept is still early in the market, with about 21% of organizations currently offering it, but there is a projected significant increase in the next three to five years across all three types.

The Crucial Role of the Supply Chain in Business Growth

The supply chain plays a vital role in supporting business growth and commercial innovation, going beyond just cost-cutting.

It is becoming a competitive differentiator in the market and requires the alignment and involvement of the entire organization, including the C-suite.

Supply chains also need to focus on maintaining customer satisfaction during disruptive events, requiring a robust risk management framework and effective communication without overdoing it.

One example of successful customer enablement is the use of IoT devices in the supply chain, as demonstrated by the British company Castrol, which has transformed the commercial relationship with customers through innovative replenishment processes.

Anticipatory Service in Healthcare and the Evolution of Supply Chain

Companies like Johnson and Johnson are preempting customer needs in healthcare, improving efficiency, and patient outcomes.

Supply chain as a service is a new model where enterprises extend their capabilities to drive more revenue and value, different from traditional outsourcing.

The model works well for technology solutions, but physical logistics services come with more complexities.

Medium-sized companies are in the sweet spot to benefit the most from supply chain as a service.

Large enterprises are increasingly engaging in supply chain as a service to free up internal staff for higher-value activities.

Medium-sized companies benefit the most from this model, especially those lacking foundational capabilities and struggling to manage various operations.

Supply chain as a service is being adopted across all industries, with companies like McDonald's and Amazon offering these services.

The decision to engage in this model with a competitor depends on whether it will impede competitive advantage and customer experience.

A company within the Woodwood Group, Primary Connect, is now offering supply chain services to over 1,000 clients, including logistics, transportation, and optimization.

The company is not just serving its own organization but has created a separate business unit for providing these services.

Organizations offering supply chain as a service can provide value-added services to customers and may start with existing resources before requiring dedicated staff and technological investments to scale their services.

Developing a Successful Go-to-Market Strategy

A successful go-to-market strategy requires expertise and initial investment in the right resources, such as project managers and support staff.

The approach should start with a measured foundation in customer satisfaction and consistency before moving on to customer enablement.

It's important to focus on mindset change, communicating value, and performing a thorough strategy assessment, while also starting small and leveraging competitive differentiation.