Resiliency in the making

Resiliency in the making

Turning adversity into advantage
for engineering, supply, production and operations

From insights to action, the path to extraordinary value starts here.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology
1
Resiliency in the making

Executive summary

Capturing competitive advantage in pursuit

of durable resilience.
Timeline of recent disruption 40%
Disruption has hit businesses hard in the last few 2020 Global pandemic increase of product order-to-delivery
lead times reported in the last 2 years.
years. Unforeseen fluctuations in demand at the Unforeseen rise in demand for digital products
height of the pandemic, geopolitical unrest driving and online experiences

$1.6t
up wages, material costs and energy prices, Truck driver shortages lead to logistics
climate emergencies, and technology innovations
2021 challenges Cyber-attacks on production lines
have revealed dangerously low levels of resiliency
Semiconductor shortages peak potential revenue growth opportunity
within engineering, supply, production and
2022 War in Ukraine left on the table each year.
operations.
This vulnerability has caused businesses to Raw materials and critical minerals shortages
miss out on a staggering $1.6 trillion in resulting in energy price hikes Only

17
revenue growth opportunity on average each Key engineering talent in Ukraine and Russia
year.
Many businesses have responded with short-term displaced or conscripted to military duties
fixes, quickly applying them to complex global 2023 Inflation soars of companies say they have a
networks designed for cost efficiency and just-in- Global talent shortages %
multiskilled workforce today.
time deliveries. Others have resorted to reactive Extreme weather

+3.6%
strategies
events
like inventory buildup, which came at a cost.
Inventories Today Tech breakthrough:
Generative AI
used in production have reached a value of $1.9 additional revenue growth that the more
trillion.1 2030 The next
New known unknown…
geopolitical risks resilient companies were able to capture
compared to their less resilient rivals.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 2
Resiliency in the making

The missed growth opportunity

Figure 1: Disruptions drove $1.6 trillion in missed annual revenue

growth

Accenture sought to better understand how revenue than their peers in the bottom quarter Industrial Equipment $433b

businesses respond to, and manage, disruption of the maturity scale. Better resiliency enabled a
High-Tech $269b
in their engineering, supply, production and competitive advantage that also helped them
operations functions. We developed a achieve an additional 1.2 percentage points in EBIT Utilities $163b
framework of 31 capabilities that enable margin compared to their peers with lower
resiliency and then deployed a global survey to resiliency. Automotive $162b
(OEMs)
over 1,200 senior executives from 11 industries These more resilient companies are investing in
Oil & $137b
to evaluate their investment and maturity in the right mix of resiliency-focused capabilities Gas
these capabilities. and achieving better business results because Consumer Goods & $125b
Executives told us they missed out on revenue of it. This report will delve into three actions that Services
growth opportunities of between 7.4%-11.0% due companies can take to join them, growing their Life $116b
Sciences
to maturity in the key capabilities that enable
disruption in their engineering, supply, production greater Automotive (Ancillary/Parts) $79b

and operations. When we looked closer, we resiliency in engineering, supply, production

Chemicals $61b
discovered that the more resilient companies and operations, enabling them to harness the
(assessed in the power of disruption to their advantage. Metals & $49b

top quarter of resiliency maturity) capitalized on Mining

Aerospace & $41b
more opportunities, in turn capturing 3.6% greater
Defense

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 3
Resiliency in the making

Resiliency
We define resiliency in the context of
engineering, supply, production and operations
as an organization’s ability to proactively sense,
absorb, adapt to, and recover from disruption
so it can produce goods, deliver services, meet
and increase customer demand, and respond
to changes faster than its competitors.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 4

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 4
Resiliency in the making

Contents

A first step Three actions to The time to

toward resiliency build resiliency invest is now
6-8 9-23 24-27

5
Global local

A first step toward

resiliency
Resiliency in the making

Today’s challenging business environment is prompting executives to

re-evaluate diversifying and localizing their sourcing and production footprint.

The turbulence of the last few years has forced many next three years. Adopting the best sourcing In addition to regional sourcing and proximity-
businesses to address the vulnerabilities in their strategy and identifying new production based production, companies are actively exploring
highly globalized supply and production networks. facility locations will be key to bolstering relocation and reshoring to reduce their dependency
resiliency, sustainability and flexibility. on any one specific country, region or supplier.
Companies taking stock of their production
and supply chain footprints indicated that Leaders are also prioritizing proximity-based hubs
they will reduce their dependency on sole that concentrate production facilities and sales
sourcing strategic commodities in the next
three years. Today, only 42% of respondents
are making use of multi-sourcing strategies
within the same region to streamline logistics,
improve inventory management and accelerate
response to market demand. We found that the
78%
of companies will use multiple sites
compared to 72% who plan to in the future. manufacturing of products across multiple plants in 3 years’ time to produce their
is expected to rise from 41% today to 78% in three products, up from just 41% who are
Regional sourcing is also bouncing back. years’ time. This rise aligns with the increasing already doing this today.
Numbers are set to leap from 38% of respondents preference for producing goods within the same
today mostly sourcing regionally to 65% in the selling region, which is anticipated to reach 85%
in three years, up from 43%.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 7
Resiliency in the making

Companies must be mature in resiliency-focused

capabilities to help mitigate against future disruption.

Adding multiple new production and supply

options provides more opportunities to be
resilient in the face of change. However,
as supply networks diversify, complexity
grows with the addition of new suppliers,
From globalized industrial …to localized, reconfigurable and more silos appear and companies quickly
value chains today… decarbonized value chains in the future. find themselves having to navigate varying
regulations across different regions and
• Decentralization and localization of plants and
• Large global footprint with free-flowing borders. When making major changes to
suppliers, based on the markets or geo-locations
movement of goods and services that de-risk networks, it is important to assess the
they trade in
serve every customer globally resiliency-focused capabilities and digital
• Limited local sourcing • Systematic double sourcing practices maturity of the organization to better unlock
value and avoid creating more problems.
• Plant specialization is the order of the • Flexible industrial models with the ability to
day (e.g. one plant in one location, rebalance production operations across sites
Fortunately, the rapid technology innovation
mass producing one specific product) • De-risking of any over-dependence on a from the last several years provides ample
single opportunity for businesses of all sizes to
supply base or location
advance their digital maturity and address
• Relocation programs to bring production disruption strategically.
closer to consumption

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 8
Adapt
advance
Three actions to build resiliency
Resiliency in the making

When it comes to building

resiliency, piecemeal solutions are
inadequate.
Establishing resilience requires a total rethink of From this list of 31 capabilities, we suggest that
the business and operating model—an enterprise- companies prioritize investment in the 11 emerging
wide strategy that sets the stage for a cascade of capabilities most aligned to better resiliency
transformative changes. In today’s fast-moving outcomes—the Resiliency 2.0 capabilities.
consumer and tech-driven world, companies who
wish to unlock new value and transform in this way For example, dynamic and sustainable product
need to invest in, and scale up, their maturity development capabilities enable businesses
across to reach customers faster—moving from
31 resiliency-focused capabilities (see figure 2). ideation to production to go-to-market at an
Powered by data, digital and AI, these accelerated pace—while making it easier for
capabilities enable organizations to make engineers to design more relevant, sustainable
broad changes—from the employee and and differentiated products and experiences.
customer experience to sustainability—all while
increasing revenue and reducing costs.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 10
Resiliency in the making

Figure 2: Our study measured maturity across 31 capabilities that enable resiliency in engineering, supply, production and operations.
The highlighted capabilities represent the most important areas where companies should prioritize investment.

Denotes emerging Resiliency 2.0 capabilities.

Dynamic and sustainable Autonomous production Agile organization

product development A low-carbon industrial system capable of quickly and A cross-functional, platform-based organization with flat
seamlessly reconfiguring and correcting to adapt to change. leadership structures and scaled-up digital foundations
The ability to design new products and processes in an
• Hyper-flexible and automated production lines concept built for agility.
eco-design and co-engineering approach, leveraging a
continuous feedback loop along the life cycle. tailored for high customization or ability to quickly • Decentralized decision making close to execution, with
reconfigure to change transparency at all levels
• Collaborative approach to digital twin platforms
• Dynamic production scheduling capabilities • Remote expertise capabilities (leveraging AR, VR and
• Eco-design approach to embed sustainability by such)
• Inventory optimization models
design (e.g. carbon footprint, circularity)
• Proactive risk management framework and business
• Continuous upgrade of offerings to adapt to customer • Integration of sustainability parameters for CAPEX
continuity plans
needs (e.g. product services upgrades, product
• Extensive use of company-wide shared services/resources
features upgrades based on over-the-air) Demand foresight pools for services and support functions
• Agile development methodologies for non-software
The ability to anticipate and predict changes in demand and • Extensive use of outsourcing of non-core activities
components (systems, mechatronics, mechanical)
customer needs, as well as greater societal and cultural shifts. • Fully deployed cloud IT infrastructure using advanced
• Application of resiliency-by-design approach (e.g.
• Structured analytics tool to predict surge or decline in cybersecurity practices
standardization, modular approaches, broader supply
demand (in addition to customer historical forecasts)
base alternatives)
• Proactive customer segmentation to arbitrate demand in Flexible workforce
• Digital feedback loop during in-service, based on
case of shortage A highly versatile, adaptable and diverse workforce
analytics and IoT
• Customer trend control tower collecting data insights underpinned by a culture of continuous learning.
(market, connected products, customer journey, sentiment • Having a versatile/multi-skilled workforce across the supply
analysis) to design and price new offerings
Localized and reconfigurable supply chain, production and operations to facilitate resource
reallocation
chain networks
Smart end-to-end control towers • Flexible employee contracts allowing quick adaptation of
A reduced geographical spread of supply networks resources to activity level
to achieve a more local, low-carbon supply base and Visibility solutions that more quickly anticipate and identify risks,
manage disruption and analyze causation throughout the value chain. • Skills demand management using analytics and skills
transportation flow.
ontology allowing quick matching of competence with
• Use of network simulation/optimization tool to optimize • Dynamic and data-driven planning with “what-if”
needs
production and supply chain footprint changes scenario capabilities
• Procedures and methods to ensure team safety
• Alert system to identify risks in the supplier base (from • Predictive early detection of operations issues (poor-quality,
for catastrophic events that go beyond regulatory
Tier-1 to Tier-N levels) breakdowns, maintenance needs, non-conformity)
requirements (e.g. natural disaster,
• Ability to increase storage or freight capacity • Digital cockpit enabling real-time visibility of violence/terrorism)
end-to-end operations
• Ability to simulate impact of disruptive scenarios
• Digital tool to quickly understand impact of supply shortages/
production or shipping delays on sales and costs

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 11
Resiliency in the making

Bottom 25% Top 25%

Average Average Average
Figure 3: Resiliency maturity scores by industry

63
But there’s work to do. While most executives Aerospace & 23 80
Defense 62
anticipate advancing their resiliency-focused
Utilities 34 84
capabilities over the next three years, they 6
concede that today they would rate the overall Automotive (Ancillary/Parts) 37 1 83

level of resiliency in their end-to-end engineering, 60

Oil & 36 80
supply, production and operations as quite low. Gas 59
Life 26 87
Our analysis shows that on average the Sciences 56
All industry 3 79
companies we surveyed exhibit a maturity average 1
56
score of 56/100 (see figure 3) across all Consumer Goods & 34 7
31 capabilities for resilience (see figure 2). Services 4
56
High Tech 24 79
56
While many companies are transforming, not all Chemicals 38 76
are realizing the benefits of transformation and 55
new capabilities because their ways of working Industrial Equipment 33 7
1
55
have not changed. These companies are taking a Metals & 3 73
fractured and isolated approach to transformation, Mining 1
50
resulting in limited benefits and stalled maturity. Automotive 27 76
(OEMs)

0 10 20 30 40 50 60 70 80 90 100
Maturity score (0-100)
Partially
POC & Pilot deployed Ongoing transformation Transform ways of working

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 12
Resiliency in the making

Action 01

Invest in visibility, predictability

and continuity-focused tech
For companies to increase
their resilience and
Action 02
generate more revenue,
they need to focus on Adopt “shift left” engineering
three important actions. capabilities to embed resilience in design

Action 03

Develop a multi-skilled
workforce for agility

13

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology
Resiliency in the making

Action 01 Dynamic and

sustainable
Localized and
reconfigurable supply
Autonomous Demand
Smart end-
to-end
Agile Flexible
production foresight organization workforce
product chain networks control towers
development

Invest in visibility, Resiliency 2.0 capabilities featured:

predictability and •
•
Dynamic, data-driven planning
Hyper-automated production lines
•
•
Early predictive fault detection
Proactive customer segmentation
• Demand surge/decline analytics

continuity-focused tech
Companies need the capabilities to visualize and Figure 4: Resilient companies are alerted to disruptions faster,
control their operations. This enables real-time meaning they also understand, react to, and recover from disruptions sooner.
insights and data sharing across suppliers,
factories, plants, distribution centers, logistics Fastest Average Slowest
Disruption companies companies companies
carriers and customers. But this is far from the
norm. Only 16% of companies surveyed have these
C
capabilities, and only one in 10 have near real-time A A A
C
C

Performance
alerting. This lack of visibility hinders their ability to
be made aware
of, act on, and recover from shocks efficiently.
Our research reveals that the average time from being B

alerted to a disruption to staging a full recovery is three B

B
months, and it can even reach five months (see figure 4).
For 57% of companies it takes a week or more just to be 1 2 3 5 8 1 33 8 15 Time
alerted to production or supply network disruptions. Even 3 1 2 (days)
then, almost 80% of executives say it takes an additional
A Time to be alerted B Time to understand and react C Time to recover
week or more to assess the disruption’s impact.
Disruption refers to an event that has a material impact on the client, product, plant site or sales. Recovery refers to the time needed to reconfigure the supply
chain in terms of planning and sourcing or restarting a production line or plant site. Fastest companies is average performance of top quarter response
performance. Slowest companies is average performance of bottom quarter response performance.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 14
Resiliency in the making

Companies that want to shorten these The increased visibility, reconfigurability and ability
recovery times should adopt demand foresight to ramp-up automated assembly processes at
and smart end-to-end control towers. They speed in response to a sudden shift in consumer
should strive towards reconfigurable supply preferences will enable companies to proactively
networks and autonomous production to gain streamline operations, optimize resource allocation
real-time visibility and control over the entire and adjust productivity levels to respond to
value chain, from suppliers to customers. disruptions in real-time or near real-time. This
does not only help with resiliency: As consumers
Demand foresight capabilities provide the continue to seek out hyper-personalized and
structured analytics and customer trend insights customized products, companies will need to be
to drive new offerings and help arbitrate demand adept in autonomous production capabilities to
in times of shortages. Smart end-to-end control capture these revenue growth opportunities.
towers provide scenario analysis and real time
end-to-end visibility to provide early detection and Looking ahead, generative AI can support even
correction of operations issues. Reconfigurable greater cross-organizational collaboration by
supply chain networks and autonomous creating action plans for meetings based on shared
production provide the flexible backbone to data, translating meetings in real-time for attendees
dynamically change operations at a site or shift in separate geographies and even automating
from one site to another to maintain production information exchange across departments.
levels when faced with ongoing volatility.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 15
 Case study:

Enhancing The challenge

A multinational company producing heavy

The outcome

Within six months efficiency soared by 25

resiliency by and high-value equipment struggled to ensure

operational efficiency and continuity in meeting
percentage points, resulting in higher productivity
and reduced waste. However, equally important

increasing production goals due to a lack of real-time visibility

into its production processes.
was the enhancement of operational continuity.
The factory floor now enjoys improved visibility

the visibility The solution

and data-sharing capabilities that empower
supervisors to make proactive, data-driven

of production The company implemented a cloud-powered,

decisions to prevent disruptions and downtime.
This comprehensive approach ensures better

and operational
smart, connected factory via an industrial internet efficiency and minimizes potential risks, making
of things (IIoT) technology platform. Integrated the production process more resilient and
adaptable to challenges. The success of this
continuity.
sensors and connectivity tools linked physical
assets in the factory to the digital world, providing implementation proves that investing in visibility,
valuable real-time insights. predictability and continuity-focused technology
can revolutionize operations, while still being
scalable for future growth.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 16
Resiliency in the making

Action 02 Dynamic and Localized and

Autonomous Demand
Smart end-
Agile Flexible
sustainable product reconfigurable supply to-end
production foresight organization workforce
development chain networks control towers

Adopt “shift left” Resiliency 2.0 capabilities featured:

engineering capabilities to • Collaborative approach to digital twin platforms

• Continuous product offering upgrade
• Eco-design for sustainability

embed resilience in design

Businesses are under pressure to increase resiliency potential impacts of disruption on the product at the Digital twin solutions also democratize access
while at the same time reduce costs, improve cycle time of design. They also help reduce lead times, to valuable product data and insights, fostering
times and enhance product quality. A “shift left” and improve customer and revenue retention. improved collaboration during research and
strategy upends the status quo to help them achieve design phases.
these goals. It enables resiliency in engineering by Digital twin solutions help build resiliency by
moving activities earlier in the development process, enhancing transparency and offering real-time Our survey found that two out of three executives
allowing companies to get products, processes visualization of production activities. As digital anticipate a shift in the next three years towards
and ways of working right the first time and address replicas of physical production facilities—down to a fully embedded collaborative approach that
potential issues before production begins. individual assembly lines and machines—they allow incorporates stakeholders across all operations.
product designers and engineers to proactively
Resiliency 2.0 capabilities centered around dynamic identify and troubleshoot potential prototype
and sustainable product development can help issues or defects and iterate the design before
businesses successfully implement a “shift left” production begins.
strategy. These capabilities help companies see the

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 17
Resiliency in the making

Additionally, our survey found that the number of executives

planning to increase designing for resiliency will jump from 17%
today to 63% over the next three years. This involves incorporating
process standardization to drive cost efficiencies, modular design
approaches to increase flexibility, and alternative supply base
options to reduce vulnerability.

By involving suppliers and customers early with a “shift left”

approach, companies can also address evolving customer needs
and expectations before they lead to dissatisfaction. Companies can
achieve these goals by seeking customer feedback during product
development or service enhancement stages, and then use that
feedback to continuously upgrade offerings. Companies can also
leverage digital twin solutions to bolster this capability.

Tighter environmental regulations mean that companies must also

add sustainability considerations to product design processes such
as their carbon footprint, environmental impact and circularity. By
using an eco-design approach that “shifts left”, companies can
integrate sustainability principles into product design from the
outset and embed them throughout the value chain.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 18
 Case study:
The challenge The outcome

Reinforcing A leading global biopharmaceutical company faced

increasing pressure to expedite the delivery of its
The impact of the “shift left” strategy went beyond
operational efficiency. The tech transfer cycle time was

resiliency through new emerging products portfolio while still ensuring

safety, compliance and an exceptional customer
significantly reduced from 12 months to just seven to eight
weeks, enabling the company to bring life-saving products

a “shift left” experience. To maintain its position as one of the

most valuable pharmaceutical companies globally, it
to market faster. This accelerated timeline improved the
company’s competitive edge and strengthened its resiliency.

strategy in a sought to enhance resiliency by revolutionizing the

handover of information from R&D to production in
By identifying and addressing potential issues earlier in the
development process, the company achieved a heightened
biopharmaceutical order to address potential design issues early in the
development process.
ability to recover from potential setbacks. The approach
ensured supply chain readiness to manage a more complex

tech The solution

product portfolio. As a result, the organization demonstrated
agility and adaptability to evolving market demands,

transformation. The company deployed a “shift left” strategy by

investing in digital twin technologies that could
underlining its resiliency.

The “shift left” strategy empowered the company to embrace

simulate a future state operating model with precision. resilience as a core value. The ability to identify, anticipate,
It worked with a trusted partner to design a smooth and address potential hurdles early on enabled faster, safer,
and digitized handover process, promoting better and more compliant product launches, which solidified its
collaboration between R&D and production teams. position as a leading global pharmaceutical company.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 19
Resiliency in the making

Action 03 Dynamic and

Dynamic and Localized and
Autonomous Demand
Smart end-
Agile Flexible
sustainable product reconfigurable supply to-end Agile Flexible
sustainable product configurable supply production foresight to-end organization workforce
development chain manufacturin foresight organization workforc
development chain networks
networks control towers
control
g e

Develop a multi-skilled
towers

Resiliency 2.0 capabilities featured:

workforce for agility

• Decentralized decision making
• Remote expertise capabilities (leveraging AR, VR and such)
• Versatile/multi-skilled workforce

Resilient businesses need decentralized decision- growth, only 28% of workers feel the same. And easily solved by siloed functional teams and require
making where frontline teams can quickly make while 54% of C-suite leaders are certain their employees who can work across operations.
decisions close to where the operations happen. workers’ job skills will be useful and valuable in
These teams should have access to emerging three to five years, only 34% of workers agree.2 Our survey data reveals that more than 68% of
predictive and data-driven tools that enable companies are investing in developing a multi-
them to make prompt decisions and improve While specialized knowledge in areas like skilled workforce while improving demand
recovery times in the face of disruptions. But for procurement, operations, production and management using analytics and skills ontology
this more agile organizational model to work, logistics will always be important, digitally literate, tools, and increasing flexible contracts for
employees will need the skills to effectively multi-skilled and cross-functional thinkers who employees to tap into a wider talent pool. By
leverage these advanced capabilities. understand the big picture will also be invaluable leveraging these data insights, companies are
in helping companies adapt to new complexities. increasingly identifying employees in their current
Accenture’s biennial Global Skills Survey 2023 organization who would be good candidates to
revealed that the C-suite is overestimating the For example, workers will need to know how to fulfill demand for emerging skills (see figure 5).
skills readiness of its workforce. While 50% use predictive and visualization tools and make
believe their organization is effectively preparing data- driven decisions to navigate the complexities
their workforce for the skills needed for future of modern supply chains. These complexities are
not

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 20
Resiliency in the making

Technology is the foundation for improving agility during disruptive events that may cause critical skills shortages.
For example, companies can leverage AR/VR to empower employees who have the necessary skills in one
geography to help peers successfully complete tasks in a completely different location.

Figure 5: Overall, companies are significantly increasing the level of versatility in their workforce through flexible contracts,
upskilling and skills demand management.

Use of flexible employee Multi-skilling the Demand management using

contracts is increasing workforce is increasing analytics and skills ontology is
(% of (% of
increasing
respondents) respondents) (% of
respondents)

Pilot Pilot Pilot

project to project to project to
83% 33% 83% 32% 86% 31%
partially partially partially
embedded embedded embedded

67% 68% 69%

Fully Fully Fully

17% 17% 14%
embedded embedded embedded
Today In 3 Today In 3 Today In 3
years years years

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 21
Resiliency in the making

Figure 6: Reinventing roles – machine operator to autonomous production maintenance team lead

Fundamentally, securing durable resiliency will Current role Future role

hinge on an upskilling and reskilling strategy that
brings people and technology together. Creating
Machine Operator Autonomous Production
tailored interventions known as personalized
Maintenance Team Lead
learning pathways (see figure 6) is a viable, Personalized
scalable and cost-effective way to bridge the skills learning pathway
gap. Factory automation potential: High Factory automation potential: Low
AI augmentation potential: Low AI augmentation potential: High
With this strategy, businesses can expect to Identify the skills to train…
better navigate shortages in critical skills, create a
culture of agility and provide fast, flexible Transferrable skills • Electrical • Required skills
Maintenance code safety
upskilling. • Factory • Sensor
• Time • Adaptability • Maintenance • Equipment
automation
management • Commitment safety maintenance
instrumentation
• Verbal • Responsibility • Electrical • Documentatio
• Generative AI • Digital twin
communications code n
• Teamwork • Predictive
• Equipment maintenance • Factory • Sensor
• Communications
maintenance automation instrumentation
• Documentatio • Generative • Digital twin
…and transition from a production
n role to one focused on ensuring AI • Adaptability
• Workplace factory uptime targets are met. • Predictive • Commitment
safety maintenance
• Responsibility
• Workplace safety
• Teamwork
planning
• Time • Communications
management

Source: Accenture Research based on analysis of World Economic Forum Consumer Industries Task Force of Future of Work Pilot, Occupational Information Network (O*NET), US Dept. of Labor; US Bureau of Labor Statistics.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 22
 Case study:
The challenge

Digital reskilling A national oil and gas company with nearly Additionally, a first-of-its-kind, cloud-based solution

strategy
50,000 employees sought to accelerate its was built to analyze 10 years of performance data,
digital transformation journey, develop new lines identifying workers suited for new digital roles in

empowers
of business and meet its sustainability targets procurement and IT functions. This data-driven
faster. To achieve this, the company needed approach saved talent management time and
a resilient workforce capable of decentralized eliminated managerial bias and allowed employees
decentralized decision-making and using emerging predictive
and data-driven tools to improve recovery
to assess and close skill gaps proactively.

decision times during crises. However, to enable this

model and use these advanced capabilities, the
The outcome

making at an oil employees required upskilling and reskilling. The upskilling and reskilling strategy transformed
the company’s ways of working and fostered a

and gas The solution culture of agility and adaptability. As a result, the
organization stands resilient in the face of

company. The company’s management team implemented

a comprehensive upskilling and reskilling
uncertainties,
ensuring long-term success and sustainability
strategy. A gamified learning platform powered in the ever-evolving oil and gas industry.
by AI was developed to promote baseline digital
fluency across the organization. This innovative
platform encouraged continuous learning and
empowerment among employees at all levels,
from the CEO down to teams on the ground.

Executive Summary | A first step toward resiliency | Actions to build resiliency | The time to invest is now | Methodology 23
Risk
reward
The time to invest is
now
Resiliency in the making

Many companies are still in the early stages of their resiliency

transformation and plan to invest heavily, but what stands in the way of
success?
Figure 7: The number of companies who plan to make significant investments in reshoring/
relocation, industrial automation and digitization is increasing in the next three years.

The number of executives enhancing their resilience by investing % of respondents who say they will
(see figure 7) in facility relocations, automation and digitization spend....
is increasing in the next three years—ranging from 2.5x to 4x >$500m on reshoring or >$100m on supply >$500m on industrial
today’s investment levels, which currently stand at 4.5% of average relocation chain & production automation of plant sites
digitization and warehouses
revenues or just over $1 billion. Companies are also balancing their
investments in reshoring/relocations ($450 million) with building
their digital maturity, including increased automation ($575 million)
(see figure 8). However, big plans don’t yet confidently translate into

Today
competitive advantage. Only a third of companies regard
themselves
as significantly advanced compared to their competitors.
Why? These are big, costly changes that are not undertaken frequently. As
a result, any decisions must stand the test of time. And while these
changes are considered, the business must also maintain shareholder value

In three years’ time

and reduce costs. Therefore, organizations will need a compelling vision
and clear accountability underpinning any investment to ensure they
provide both short-term value and a foundation for long-term
transformation.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now Methodology 25
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Resiliency in the making

Figure 8: Companies are enhancing their resilience by investing in

relocation, automation and digitization.

Total average investment by companies in production and

supply chain resilience

This is ultimately a journey, not a step change. Different tactical investments Reshoring, relocating
or new investments
in operational efficiencies must be pooled to bring increased proactive and
predictive visibility and transparency. The IT and OT functional departments
must be brought together to help solve a broader problem set, but with
tactical first steps aligned with their operational priorities. And business
should look at the combinatory impact of investments across relocation, $450m
digitization and automation—and how to balance those investments.
$1B $325m
Industrial automation of plant
sites and warehousing
Total average
Without this, investments (and technology) will be
investment*
fragmented, lacking a broader view of what resilient
operations of the future should look like and how to untap
value while getting there.
Those that drag their feet in the name of cost-cutting or priority $250m
paralysis could miss the opportunity for long-term resiliency. Digitization of production
and supply networks

*Based on $23B average size of companies we

surveyed.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now Methodology 26
|
Resiliency in the making

Assembling of $830 million on average—depriving the least

resilient companies from sharing in the success.
So, how can companies get started on the
actions that build resiliency in engineering,

the pieces With an estimated $1.6 trillion of potential revenue

left on the table each year on average, it’s a prize
supply, production and operations?

for resilience
worth fighting for. To build resiliency, companies • Evaluate current capabilities within each of the
should focus on three core areas: areas in scope to identify gaps.
• Develop the “North Star Vision” for what a
Visibility: Enhanced visibility across the supply resilient future-state function could look like and
chain and production processes allows for real- host collaborative open-door workshops to share
The unprecedented disruptions affecting every time tracking and collaboration, enabling quicker the vision and iterate as needed.
industry sector worldwide have highlighted the decision-making and responsiveness during • Look at investment needs holistically. Are
critical need for resilience across all operational disruptions. relocation, digitization and automation
areas—from engineering and production to investments balanced to deliver results?
operations and supply chain. The net result is that Resiliency in design: Moving activities earlier in • Build the financial and executional governance
companies must adapt and embed resilience- the development process allows companies to get so that IT and OT budgets and solutions can be
focused capabilities into their operations to ensure products, processes and ways of working right combined to streamline and accelerate digital
products are manufactured cost efficiently, safely, the first time and address potential issues before maturity.
on-time and sustainably. production begins.
Those who invest in developing resiliency
Our analysis has demonstrated that businesses New ways of working: Equipping the workforce capabilities and the supporting digital foundation
investing in resiliency-building capabilities and with the necessary skills and decentralized will capture market share from those who delay. The
improving digital maturity significantly outperform decision-making enables them to navigate through time to invest is now, and at an accelerated pace,
their peers. Early adopters (i.e. the most resilient disruptions. Companies need to invest in upskilling before the next disruptive event comes knocking.
companies) who have embraced these practices and reskilling programs to create a resilient and
are already generating additional annual revenues agile workforce.

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now Methodology 27
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Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology
Resiliency in the making

About the
research
Surveying across our key Americas
EMEA
37%
(461)
43% (524) APAC
capabilities framework 20% (245)

Accenture developed a framework of the 31 key

capabilities that foster resiliency. We then deployed
a global survey to evaluate companies' maturity in
strengthening and establishing these capabilities.

We surveyed 1,230 engineering, supply, production and

operations functional leaders across 11 industries and
with a global reach representing 14 countries across the
Americas, EMEA and APAC regions. The countries and # of respondents 80 112 112 112 112
regions we surveyed included Australia, Canada, Brazil, Aerospace & Automotive Automotive Chemicals1 Consumer Goods
Defense Ancillary/Parts OEM & Services
France, Germany, Mexico, Italy, China, Spain, India, UK,
Japan, Sweden and the US. We assessed their strategies for
sourcing and production, responsiveness to disruptions and
steps towards resiliency against those disruptions. 112 112 142 112 112 112
High-Tech 2
Industrial Life Metal & Oil & Gas Utilities
Equipment Sciences3 Mining

1
Including petrochemicals; 2
Consumer/enterprise technology including components; 3 Includes biotechnologies and medical technology

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 28
Resiliency in the making

Maturity model Analysis of The capability insights

construction disruption impact underpin the actions for
resiliency
We developed a maturity model based on expert We then evaluated the capabilities against business By analyzing the maturity of the 31 capabilities
interview responses related to the current adoption performance during a widely accepted period of across industries and during disruption we were able
of the 31 capabilities for resiliency. For example, we prolonged disruptions. Analyses of the impact of to identify three actions for resiliency:
inquired about investments in relocation/reshoring, disruptions were based on revenue impact, margin
automation, digitization and inventory. erosion, recovery times, EBIT and lead times. We Invest in visibility, predictability
also looked at the performance of supply networks
01 and continuity focused tech.
We analyzed capability maturity and its impact and production in terms of the estimated time (in
on business performance based on a regression days) Adopt “shift left” engineering capabilities
framework where results are controlled by it took our respondents to be alerted to, understand
02 to embed resilience in design.
industry, company size, location, production and recover from disruption.
and sourcing strategies and investments in Develop a multi-skilled workforce
automation and digitization. We awarded a
03 for agility.
numeric score to each of the capabilities based
on a scale from “not started” to “fully deployed
and ways of working have changed.”

Executive Summary | A first step toward resiliency | Three actions to build resiliency | The time to invest is now | Methodology 29
Resiliency in the making

Authors Contributors

Sef Tuma Jeff Wheless Rushda Afzal

Global Engineering & Pascal Brosset

Principal Director – Industry X,
Manufacturing Lead, Accenture Research Stephane Crosnier
Industry X
Liam Friel

Inge Oosterhuis

Mike Poland

Camille Prost
Max Blanchet Stephen Meyer
Maria Rey-Marston
Global Supply Chain Principal Director – Supply Aakarshuk Sarna
& Operations Lead, Chain & Operations,
Accenture Strategy Accenture Research Nigel Stacey

Matt Thomas

Kris Timmermans

and Professor David Levi Simchi, MIT

Sunita Suryanarayan
Acknowledgments
North America Supply
Chain & Operations, The authors would like to acknowledge Alexa Mouta, Catalina

Resiliency Lead Rodriguez, Deepak Tantry, Iys Suyambulingam, Laura Kopec,

Marcin Bodzial, Pierre Hure, Somioranjan Mekap, Taurai
Nyaruwata, Yeye Xiao, Ajay Sivaramakrishnan, Ruth Keane,
Terence Paul and Jamie Byrne for their contributions.

30
Resiliency in the making

Glossary References

31 capabilities More or highly resilient companies 1. Manufacturing inventory hits record $1.8tn worldwide –
The 31 technologies and tools that, if invested in, drive resilience A company that has invested in more of and better established Nikkei Asia, June 2022
in engineering, supply, production and operations. the 31 capabilities.
2. Becoming a skills-driven organization, Accenture
Agility OEE Skilling Study, 2023
The ability of organizations to adapt to changes measured by Overall Equipment Effectiveness (OEE) is a performance
the time it takes to be alerted to, understand and recover from a metric used to measure the effectiveness of equipment,
disruption. production lines or facilities by calculating equipment availability,
performance rate and output quality.
Co-engineering
Operations executives
A collaborative process involving internal and external
stakeholders—from engineering, product R&D, design, operations, These are senior professionals in engineering, manufacturing,
marketing, cybersecurity and sustainability teams, suppliers and supply chain and operations who manage operational activities
customers—that enables joint decision-making when designing to improve efficiency, meet goals, manage budgets and work
and manufacturing a product. with other senior leaders to meet organizational objectives.

Design Production
A process to develop and test a product, including includes R&D To make or manufacture a product from components or raw
and design engineering. materials using discrete or process manufacturing and engaging
R&D, engineering or maintenance, repair and operation functions.
Digital Twins
Virtual replicas of physical systems or processes that can be used Quality
to simulate and optimize behavior in real-time. Production rejects or field failures such as infant mortality or
latent design defects.
Disruption
Events such as geopolitical shifts, extreme weather or Resiliency
technological breakthroughs that impact an organization’s We define resiliency in the context of engineering, supply,
engineering, supply or production operations. production and operations. as an organization’s ability to proactively
sense, absorb, adapt to and recover from disruption so it can
Efficiency
produce goods, deliver services, meet and increase customer
Processing a product with no downtime and no defects.
demand and respond to changes faster than its competitors.
Lead time
Supply
The duration between product order and product delivery.
Supply chain, logistics and related operations.

31
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