From supply chains to networks, a disruptive mindset and data readiness are key to success

The term “supply chain” is obsolete. It conjures a linear process, which no longer reflects the non-sequential, multi-tiered, and interconnected reality of 2024 supply networks (see Exhibit 1).

In the modern supply landscape, businesses must move from traditional, siloed supply chains to integrated, data-driven supply networks, achieving full visibility across n-tier suppliers and subcontractors. This shift is driven by digital technologies such as AI and blockchain, which enable real-time monitoring and predictive analytics. However, enterprises must address the debts in skills, processes, technology, and data accumulated over the past three or four decades.

Exhibit 1: The term supply chain is a misnomer that implies constrained and linear thinking

Source: HFS Research, 2024

In September 2024, HFS Research, in collaboration with Neo Tangent, hosted an exclusive roundtable in New York for supply chain leaders to explore the future of supply networks. The event brought together executives from leading global organizations—including AB InBev, Estée Lauder, Google, Chubb, Deutsche Bank, HSBC, and Li & Fung— to discuss the strategic shifts and technological advancements shaping the supply chain space (see Exhibit 2). The keynote for the session was delivered by Spencer Fung, executive chairman of Li & Fung, who provided invaluable insights into how organizations can adapt their supply networks to meet the challenges of a rapidly evolving global landscape.

The shift toward non-sequential, complex, and more global supply networks with disruptive business models is here. While some may perceive it as a threat, it can be viewed as an opportunity from a different perspective. For example, the rapid inventory turnover and frequent product launches by new-age e-commerce players such as SHEIN may initially seem daunting, but they actually provide the opportunity to reconsider traditional metrics and models, and embrace a continuously evolving, disruptive mindset.

— Spencer Fung, Executive Chairman, Li & Fung

Exhibit 2: Supply chain aficionados delved into present challenges and future ambitions

Source: HFS Research, 2024

The discussions pivoted on the increasing complexity of supply ecosystems driven by multi-tier supplier models, data challenges, regulatory pressures, and the role of emerging technologies such as AI. Participants explored how organizations can balance short-term tactical wins with long-term strategic investments in resilience and sustainability.

Key event takeaways include:

A Bay Area supply chain mindset is a business necessity

Adopting a self-imposed disruptive mindset and continuously adapting operating models become increasingly critical in a world where sustainability norms, border regulations, and business models are constantly changing. For instance, every country (and even a few states within the same country) is developing its own sustainability regulations. This makes it difficult for global companies to establish one-size-fits-all programs. The key is to create a common, global framework customizable to local requirements. This will ensure organizations remain compliant as they innovate.

The framework must be provisioned so changes can be implemented rapidly across the supply chain in response to new regulations. This framework must facilitate the swift implementation of new regulations across the supply chain, enabling seamless adaptation to change.

Prioritize overcoming data debt and streamlining ownership; create a data launchpad

Roundtable participants emphasized that enterprises face several types of debt—technology, process, skills, and data. They consider data debt the most critical barrier to building autonomous and sustainable supply networks. Fragmented data across different departments and systems and a lack of collaboration between key entities such as manufacturers, distributors, logistics providers, and suppliers make it difficult for organizations to achieve end-to-end visibility.

The discussion highlighted the importance of having a single supply chain owner within the enterprise to ensure accountability and coordination. Participants also underscored the need for clarity on data ownership and governance to harness data for technology and business integration engagements.

GenAI could be a game changer in building autonomous supply chains of the future, but it’s not a slam-dunk

Participants agreed that despite the huge GenAI opportunity, they have been late to cash in, which supports the latest findings HFS presented during the discussion (see Exhibit 3).

Exhibit 3: Although GenAI is touted to play a key role in achieving the fundamental tenets of future supply chains, the journey has not been easy

Source: HFS GenAI survey of 460 senior supply chain executives

Enterprises should take a methodical approach to select a GenAI use case effectively. This involves considering strategic alignment regarding broader business goals, potential ROI, and the timeframe for delivering value. It is crucial to evaluate use cases based on their broader impact across the supply chain, scalability, and feasibility—particularly regarding data availability and organizational readiness.

Prioritizing use cases where high-quality, structured data is readily available in one place can ensure more reliable outcomes. While quick wins can help build momentum, it’s vital not to overlook long-term, transformative projects with cross-functional benefits. Prioritize areas likely to deliver the most significant impact, such as demand forecasting, supplier risk management, logistics optimization, and sustainability.

Achieving resilience, efficiency, and sustainability ‘together’ is essential

Success in the modern supply network depends on finding the right balance between resilience, efficiency, and sustainability. Businesses often mistakenly view these as competing priorities, but they are, in fact, mutually reinforcing when approached correctly. Resilience ensures businesses can withstand disruptions, efficiency helps them stay competitive, and sustainability secures long-term success and compliance with regulations.

During the pandemic, many enterprises enforced resilience over efficiency and overstocked inventory. This was the correct tactic at that unusual time. But that skewed demand-supply situation is over. It’s time to rethink solutions and services; it should no longer be about choosing one over the other. The mindset must be to consider all three at the start of designing your supply chain and finding ways to achieve them together. A case in point: If an enterprise wants to adopt sustainable packaging and eliminate plastic, the discussion must start with how to bring sustainable packaging to the same—or lower—cost point.

The Bottom Line: Building future-ready autonomous supply networks requires a disruptive mindset that prioritizes data quality, resilience, collaboration, and sustainability.

The path to success is through inclusive transformation, not trade-offs. Invest in technology and processes driven by resilience, collaboration, and sustainability. Upskill your workforce to meet an ever-changing environment, and ensure your data quality supports real-time decision-making. Enterprises that achieve this balance will emerge as leaders in the next epoch of supply networks.