Supply chain disruption: For EY, just another day in the office and another problem to solve

Know thyself and thy supply chain … or go to the board for more funding  

In early November 2021, and in reaction to the deluge of news and analysis around supply chain disruptions worldwide, TBR met with key members of EY’s supply chain to discuss their firm’s overall response to the current crisis as well as EY’s capabilities and offerings around supply chain management. Al Mendoza, Americas and US-Central Supply Chain leader, and his Europe-based and Shanghai-based counterparts, Matthew Burton and Rodrigo Cambiaghi, respectively, shared their insights on the now, next and beyond for supply chains, including a look at long-range, tectonic changes coming for global enterprises.  

Nothing about the current global supply chain disruption, which has paralyzed ports, slowed manufacturing lines and contributed to growing inflation, surprised EY. The firm’s supply chain professionals saw the deeper and more broadly felt repercussions from COVID-19 as a tsunami that woke up many enterprises to the third- and fourth-level risks they were running in their highly networked and global supply chains.

For EY, which has been working for years with clients on supply chain transformations, the supply chains that have suffered the most during the pandemic — from the peak until now — are those that, according to Mendoza, “don’t understand themselves.” These overwhelmed enterprises did not have the talent, technology or processes in place to manage a massive disruption like the pandemic, even if their suppliers did. EY expects the supply chain ecosystem to shift substantially in the near term, as enterprises learn from the chaos caused by COVID-19 and implement the people, process and technology changes demanded by corporate boards, suppliers and clients.  

In reviewing the current state of the supply chain management market, Burton described traditional supply chains as “woefully inadequate” and said too many enterprises maintain a “linear mindset” and are comfortable with two-week timelines to adequately report on and assess existing supply chains. These enterprises, stuck with an old technology batch mentality, must invest in technology to decrease risk and derive value from their supply chains. Luckily for supply chain officers, the entire supply chain discussion has moved to the board level. In Burton’s assessment, a supply chain officer can “say ‘supply chain’ and you get funding,” as enterprises increasingly expect supply chain management to move from a cost center to differentiation across the value chain. Burton added that boards “were cost-driven and are now resilience-driven.”

TBR has repeatedly heard supply chain issues have reached board levels, but Burton’s explicit connection between disruptions and funding brought clarity and underscores one of the challenges consultancies such as EY face in working with large-scale clients: Every transformational challenge is a boardroom issue and demands funding, even as funding streams remain finite. In TBR’s view, EY’s close relationships with C-Suites and boards likely provide the firm with openings to anticipate, understand and benefit from shifting budgetary priorities around supply chain and other transformational issues.  

Now: Not enough talent and inadequate technology — an age-old story 

For EY’s clients, taking that boardroom directive and investing in technology, people and process improvements cannot happen quickly enough, in part because some enterprises continue managing their supply chains with what Cambiaghi described as “primitive technology.” Notably, primitive technologies have been made more inefficient by a lack of skilled supply chain management practitioners, inadequate training and insufficient change management. Mendoza expanded on the talent challenge, explaining that EY has three advantages over both competitors and clients, which also compete for supply chain talent.

First, as Mendoza said, EY has made a “huge investment” in training recent years, echoing comments TBR has heard from other EY leaders and professionals. Second, the firm assimilates new talent quickly and has been a net importer of talent because of the firm’s growth and culture, sentiments also echoed by other EY leaders. And third, Mendoza said EY’s supply chain practice is led by experts in supply chain, not consulting professionals with other skills brought in to manage supply chain as an offering. Mendoza, Burton and Cambiaghi made clear their passion for supply chain reflected a sense of mission, not simply another EY capability. In TBR’s Management Consulting Benchmark, EY has the second largest Supply Chain Management revenue, when compared to its Big Four peers, behind only PwC.  

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  1. […] value of the interconnected supply chain ecosystems has been gaining boardroom attention and, as EY notes, COVID-19 only accelerates the need. The pandemic was a blindside disruptor and, as enterprises get […]

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