Just how trustworthy do customers think companies' supply chains are? Well there is a gap in the perception of supply chain capabilities between customers and executives. Supply chain executives significantly overestimate stakeholder trust in their supply chain capabilities and intentions, according to a new Deloitte Insights survey report titled "Is your supply chain trustworthy?"
Of more than 1,000 executives from large global organizations surveyed, 89% of leading suppliers said customers trust their supply chain operations, compared to just 68% on average of roughly 500 customers who said the same.
The areas of differences were as follows:
Reliability --25% gap; leading suppliers = 90%, customers = 65%
Humanity --e.g., treating workers, customers and other partners fairly and with respect; 24% gap, leading suppliers = 91%, customers = 67%,
Transparency 22% gap; leading suppliers = 85%, customers = 63%
Capability e.g., ability to maintain operational consistency; 16% gap, leading suppliers = 91%, customers = 75%.
"The supply chain trust gap is far bigger than our responding executives seem to realize, suggesting there are blind spots in key areas their customers care about," said James Cascone, a Deloitte Risk & Financial Advisory partner, said in a statement.
"From the customer perspective, many COVID-19 pandemic-era supply chain challenges remain unresolved, despite improvements executives have worked hard to achieve," Cascone added. "Unfortunately, such wide gaps in trust indicators like reliability and transparency against pre-pandemic expectations stand to worsen as new supply chain risks emerge."
Nearly half (44%) of all supply chain executives surveyed expect to experience a supply chain shock in the next 24 months as a result of various external challenges including price volatility (46%), inflation (44%), resource shortages (e.g., labor and materials; 42% and 41% respectively), and geopolitical instability (32%).
Executives ranked external challenges similarly across regions; however, those in North America were more likely to cite financial market instability and inflation as their primary challenge compared to Asia/Pacific (APAC) and Europe/Middle East/Africa (EMEA) where price volatility was top of mind for supply chain leaders.
"With the potential for distrust to grow amid uncertain market conditions, it's increasingly important that supply chain leaders find a way to shrink the gap," said Michael Bondar, Deloitte Risk& Financial Advisory, trust leader, in a statement. "We see leading organizations working to identify and prioritize actions most likely to enhance the reliability and predictability of their supply chains — ranging from developing a digital thread to investing in other, advanced technical capabilities to help earn stakeholder trust, enhance business performance, and serve as a competitive differentiator."
Executives who self-assessed their organizations as "leading suppliers" were 3.9 times more likely to have a fully deployed digital thread (27% versus 7% for non-leading suppliers) and 3.8 times more likely to use predictive analytics to forecast demand (38% versus 10% for non-leading suppliers).
Leading suppliers were also 2.5 times more likely to have achieved 15% or higher annual growth rate in the last 12 months (38% versus 15% for non-leading suppliers) and 1.6 times more likely to say their organizations are resilient against external shocks or crises (34% versus 12% for non-leading suppliers).
"It seems that when executives prioritize improving supply chain trust, advancements result that extend well beyond trust-building alone," continued Bondar.
