In brief:
While there is universal agreement about the importance of making supply chains sustainable and resilient, companies are not confident about their performance. This contrast indicates their disquiet with the status quo. However, as later sections in this study show, there are opportunities to work with partners, technology and data to close the gap between intention and performance.
While progressive companies in different industries have a clear vision of what needs to be done, with many factors to consider and many stakeholders to bring along, they are finding that implementation is difficult to rush. A group treasurer emphasises that even with the right tools and technology, transformation is a gradual process that will take time because of the human aspects involved. For one, treasury teams need to gain the buy-in of the rest of the company and generate support from other departments that may not have the same level of capacity, capability or commitment to the strategy. Additionally, the business also needs to ensure that there are no negative unintended consequences or human cost to their chosen strategy.
Reviewing all five indicators that define a holistic supply chain approach (each of the five indicators has ten elements; see Methodology for full list), revealed that for almost two thirds (61%) there is a gap between perceived importance and actual performance (see Figures 5 and 6). This gap illustrates that intention doesn’t always translate into action.
Figure 5: The gap: perceptions of importance versus performance
Total respondents: 914. Analysis is based on respondents who rate performance 9 or 10 (very high performance) out of 10 and rate importance 3 (very high importance) out of 3 across individual elements within each indicator.
Taking each indicator individually, the gap between perceptions of importance and performance is consistent. On average, only two out of five corporates report excellent performance on each of the indicators, signalling the scale of the task ahead.
Figure 6: The gap is evident across all indicators Companies rate all indicators as highly important but are aware that their performance falls short.
Analysing the gap from a sector perspective, even the best performing companies see considerable room for improvement. Less than half of respondents rate themselves as performing highly across all indicators. Broadly speaking, telecoms, fast-moving consumer goods (FMCG), retail and tech companies have rated themselves as performing highly.
Figure 7: Some sectors have more ‘sustainable’ supply chains than others
It’s a similar story from a regional perspective. North American companies voice greatest confidence about their performance against all indicators, including environmental soundness and transparency of indirect suppliers. But companies in Europe, Africa and Asia have a more cautious view. Facing a greater burden of environmental regulation than any other region, European companies report the lowest performance.
Figure 8: Perceptions of performance vary across regions
Top tip:
Companies that establish visibility, monitor performance and collaboratively improve management systems in deep supply chains are best equipped to overcome challenges. For example, 76% of companies use technology that automates financing linked to purchasing and procurement processes. Digital tools combined with Sustainable Trade Finance can link the physical and financial chains to drive more resilient growth.
Standard Chartered’s partnership with SAP looks to accelerate the adoption of the SAP Ariba network though the offering of early payments with the goal to improve transparency, efficiency and spend accuracy.
