Supply Chain Mattershad the opportunity to review PwC’s 17th Annual Global CEO Survey which provides some important observations and considerations for supply chain, B2B Business Network and IT professionals.

The survey incorporates the viewpoints of over 1300 CEO’s among 68 countries and was conducted in the period of early September to December 2013. The majority of the data collected in this PwC survey, 54 percent, was collected in qualitative interviews. The full PDF copy of this survey can be downloaded at this web link.

Uncertainty remains an overarching theme including industry global markets and regulatory policies. According to the survey authors: “the number of CEO’s who believe that the global economy will improve over the next 12 months has double to 44 %, compared to the previous year.

Similar to other CEO studies we have reviewed of late, this PwC study reflects that the vast majority of CEO’s, 86 percent, view advancing technologies as transforming their businesses over the next five years. Of further note, 36 percent believe that product and service innovation offer prime opportunities for growth in 2014. In terms of geographic based differences, when asked to cite the main opportunity for growing the business in the next 12 months, 47 percent of German based, 43 percent of China and Hong Kong based vs 36 percent of U.S. based CEO’s cited product/service innovation.  A quote from the study: “For many companies, the growth agenda will be centered on new digital ecosystems- the hardware, software, services, and communications infrastructure that make digitization possible.” That statement, by our view, reinforces the stronger alliance among product management and supply chain business network, new product introduction and customer fulfillment processes.

Other important supply chain and customer fulfillment insights brought out in this PwC survey:

  • Fewer U.S. based CEO’s view China, India or Brazil are most important for company growth in 2014 with greater expectations reflected from investments in Europe and the United States. The numbers reflect a dramatic decrease in sentiment towards business growth opportunities within India. Deeper details of the findings indicate that more than half of U.S. CEO’s are concerned about current shifts in consumer spending and behaviors along with corresponding customer growth and retention strategies. 

 

  • CEO’s are focused more heavily on new products and services along with increased share in existing markets.   New geographic markets are only cited by 14 percent of respondents in the PwC findings. Thus the supply chain fulfillment strategy in 2014 is focused on existing geographic markets, primarily in developed countries. 
  • While CEO’s have gained five years of tough experience in managing profitability, 61 percent of U.S. CEO’s are still focused on cost-cutting efforts.  That is down from the 73 percent number reflected in the 2013 survey, which reflects some definitive signs of more optimistic perspectives on business profitability.  However, the study authors reflect a statistic that stock buybacks authorized by S&P 500 indexed companies rose to $445.3 billion in the 12 months ending in September 2013.  We find that situation rather troublesome since these are monies that could have been invested in process and technology related investments related to business areas, not to mention increased training of the workforce.  Instead, financial engineering of stockholder performance rules the board room. 

 

  • Regarding the priorities that CEO’s have currently placed on specific areas of technology investment, the PwC survey reflects: 
    • Business analytics- 44 percent
    • Socially enabled business processes- 41 percent
    • Mobile customer engagement- 39 percent
    • Cybersecurity- 39 percent 
  • The PwC study reflects that 70 percent of U.S. business leaders remained concerned about the availability of key skills, reflecting a sharp increase from the 2013 findings in this area. Noted by the report authors: “Do more with less” has taken a toll on morale. Business leaders recognize this: just 32 percent of U.S. CEO’s agree that the level of trust with employees has improved in their industry over the last five years.” Nearly 62 percent plan to expand hiring in 2014. The above have significant implications for supply chain talent management strategies.

 

 

For supply chain teams, as we enter the second part of 2014, this and other CEO data reflect that investments in enhancing both product and service offerings, business analytics and associated re-skilling or hiring plans should be supported by senior management teams. Customer retention and enhanced service strategies remain a high priority that should receive support in new fiscal year budgets, along with broader efforts directed at enhancing NPI processes across the global supply chain. For IT teams specifically supporting supply chain and B2B initiatives, the priorities of the business are focused on enhancing areas of supply chain business analytics and mobility access.  Technology enhancements directed at bringing together product, software and services related information sources would appear to gain senior management funding and support.

Bob Ferrari