Pierfrancesco Manenti, Gartner vice president analyst, says "commercial innovation" refers to the efficiencies that chief supply chain officers bring to the provider and to the customer.

Tracing the changing views of the supply chain function, Manenti says what was once perceived solely as a cost center came to be seen as a function critical to the success of a company. That, he says, began to change during COVID-19 and since, when many started viewing supply chain once again as simply the cost to serve the business. The good news is that high-performance supply chains that exceed expectations in today’s risk environment are still looked at as vitally important.

And not just to their own companies. “These companies are prioritizing what we call commercial innovation,” Manenti says. “They are providing services to their customers so that they are not just making them happy but helping them achieve their own goals.”

The difference, in his view, is that high-performing supply chains are aligned with the C-suite mandate to grow the business, whereas other supply chains are focused more on cost-cutting initiatives.

The commercial innovation Manenti speaks of is about more than supporting revenue by monetizing supply chains, however important that is. It’s about an external focus as well. “A company has worked through the years to create a very efficient and effective supply chain,” he says. “Why not sell that capability to third parties? It’s about everything the supply chain can offer above and beyond the products. It's really about enabling customers by offering services that help them grow revenue.”

Commercial innovation relies on truly understanding the customer experience. “The supply chain must provide access to the voice of the customer, so it can be tuned into what the customer needs.” Then, of course, supply chain managers need to make accurate, real-time decisions.