More complex trade-offs are needed to maintain a high-performing supply chain

As a result of the lessons companies learned from the COVID-19 pandemic and the various supply chain disruptions that followed in the years since, the importance of the supply chain has reached the CEO’s desk. As a result, more CEOs are demanding organizations reinvent their supply chains to avoid the issues that have plagued so many in recent years.

“The traditional formula that governed supply chain decisions no longer suffices,” a report from Bain & Company noted. “Reducing costs, optimizing inventory, improving service and quality, and driving growth remain fundamental priorities. But now, supply chains must also become more resilient, sustainable, and highly responsive to changing customer expectations.”

Trade-offs are a necessity

The report’s authors, Hernan Saenz, Tracy Parker, Adam Borchert, and Joshua Hinkel, found that supply chains are balancing the trade-offs necessary to navigate the present and future, and those that get these trade-offs right will outperform those that do not.

As an example, the report noted the priorities of the past—reducing cost, driving growth, reducing inventory, and improving service and quality—have been joined by three new priorities—increasing resilience, improving sustainability, and growing responsiveness to customer expectations.

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