Survival of the fittest supply chains

Assessing your supply chain organization as either “fit” or “fragile” all comes down to how well you deal with disruption, according to Gartner research released today. The most fragile focus on short-term survival, while the fittest supply chain organizations see disruptions as “inflection points to improve the value that supply chain provides to the business,” according to the research.

“Disruption is not a short-term situation, but a long-term trend that will most likely accelerate as we face climate change impacts, global power balance shifts, and more,” Simon Bailey, senior director analyst with the Gartner Supply Chain practice, said in a statement. “In the future, disruptions will occur more frequently and supply chains must be able to deal with whatever is coming next. Some supply chain leaders have understood that already and prepared their organization accordingly.”

Gartner says fit supply chains are able to move ahead of the competition after dealing with high-impact events while fragile supply chains fall behind. Fit supply chains are also more likely to focus on long-term strategies and investments rather than short-term gains. This is a key differentiator when it comes to cost management and growth strategies, the research revealed.

“During a disruption, supply chain leaders should try to avoid emergency cost cutting that [puts] both short- and long-term effectiveness at risk,” Bailey said. “Instead, cost optimization should be an ongoing effort in the supply chain and cost decisions must take all the operating outcomes across fulfillment, reliability, risk, and growth into consideration.”