Why providers must sure up their supply chain partnership and acquisition plans for 2022

The Situation: Expect a scramble for supply chain management capability across the consulting, technology, and services industry. 2022 will see a wealth of acquisitions and partnerships.

Late in December 2021, NTT DATA acquired supply chain consulting and analytics firm Chainalytics, complementing its previous 2021 acquisition of My Supply Chain Group, that expanded its pool of SAP resources specifically in the supply chain arena. These acquisitions are two good examples of what’s to come—but also the why. As 2022 begins, supply chains continue in chaos alongside the increasing complexity predating both COVID-19 and Brexit. To cope, organizations in all industries must improve supply chain transparency and alignment—as well as their ultimate understanding of their supply chain dynamics. Efficiency, resilience, and sustainability are at stake, for example:

• Planning better routes and buying better products will improve efficiency;
• Predicting shocks and gaining knowledge of supplier practices will strengthen resilience;
• Sustainability demands across environmental, social, and governance (ESG) factors must be addressed throughout supply chains, from decarbonization through to ensuring good labor practices and eradicating modern slavery.

Data, processes, analytics, and collaboration must underpin this effort.

Chainalytics provides services across supply chain intelligence, supply chain consulting, and managed analytics services. It boasts partners such as Alteryx, Tableau, and numerous other analytics-based firms, alongside clients from diverse industries, including retail and consumer goods, food and beverage, and industrial sectors. Its staff of more than 200 have expertise across transportation, packaging optimization, supply chain design, supply chain operations, and demand and supply planning.

As far as any acquisition can be judged before the integration effort, this one seems solid. The capability brought into NTT DATA by Chainalytics, and My Supply Chain Group before it, matches the demands of enterprises throughout industries, the data (see below), and the wider activity of the supply chain tech and services space (also below).

All corners of the tech and services industry will scramble to meet supply chain demands

A snapshot of our brand new HFS Pulse Survey data in Exhibits 1 and 2 illustrates our expectations of a 2022 supply chain boom. Fragmented and unaligned supply chains cause the biggest challenges for supply chain executives in Exhibit 1, providing perhaps the impetus for the more than 75% of 600 executives across the G2000 enterprises in Exhibit 2 expecting an increase in supply chain outsourcing spending. Now clearly, there are more barriers out there, and there is more to supply chains (and life) than outsourcing.

But across our data, whether it’s technologies like cloud, artificial intelligence (AI), or analytics, improving sustainability, or making better use of the data (which Exhibit 1 shows to be of excellent quality, as far as this group of supply chain executives is concerned), expect tech and service providers like NTT DATA to make the most of their new and existing partnerships and acquisitions in 2022. But it’s not just NTT DATA making moves…

Exhibit 1: Fragmented systems and poor organizational alignment lead the supply chain headache for executives

Sample set: 33 supply chain executives of Global 2000 enterprises
Source: HFS Pulse, H2 2021

Exhibit 2: Seventy-seven percent (77%) of Global 2000 executives expect an increase in third-party supply chain outsourcing

Sample set: 600 executives across Global 2000 enterprises
Source: HFS Pulse, H2 2021

Accenture was another big supply chain investor in 2021

Accenture made a strategic investment in December 2021, through Accenture Ventures, in Interos, an operational resilience and supply chain risk management company that uses machine learning to monitor global business relationships and identify risks. Also in 2021, it acquired Xoomworks, a procurement specialist; REPL Group, a Blue Yonder partner focused on supply chains for retail customers; and GRA, a supply chain and logistics consulting firm in Australia.

Find a full range of recent acquisitions and partnerships in our 2021 Supply Chain Management Services Top 10 report. Accenture is the stand-out in supply chain-specific acquisitions. Several others have made more general acquisitions with supply chain applicability over the past few years; for example, Genpact acquired Barkawi, Capgemini acquired Altran, and Atos acquired Miner & Kasch.

The Bottom Line: Transparency and analytics are fundamental for efficient and resilient supply chains. Expect acquisitions and partnerships from every corner of the services and technology industry.

For enterprises: Supply shocks like the pandemic might be tough to predict, but a transparent and well-understood supply chain means a better chance of responding, limiting damage, recovering—and addressing sustainability across ESG.

For providers: Mastering supply chain management will only become more of a competitive advantage across all industries. Organizations will look to their service and technology partners. The providers scrambling to meet this demand—and the ones who will eventually come out on top—will continue to acquire and partner themselves into the capability and delivery resources they need.