9.28.22 – Supply Chain Quarterly
Risks range from macro threats like natural disasters to micro disruptions like new entrants to the market, firm says.
Under pressure from the rising frequency and magnitude of supply chain disruptions, chief supply chain officers (CSCOs) can take three particular actions to navigate change on both the macro and micro level, according to a study from the analyst firm Gartner Inc.
“There are many types of macro supply chain disruptions, including natural disasters, trade wars, political unrest, cybersecurity breaches, and other events,” Chris Poole, Practice VP with the Gartner Supply Chain practice, said in a release. “In addition to managing those macro disruptions, CSCOs must also pay close attention to micro disruptions, such as new entrants to the market, emerging technologies, and internal organizational changes.”
In response to those rising threats, CSCOs can follow a strategic playbook with three broad approaches, the firm said.
First, leaders should understand their organization’s risk appetite and areas of exposure. The term “risk appetite” generally refers to the amount of risk a business is intentionally taking to achieve their strategic objectives. That measure varies widely between different companies, but a 2022 Gartner survey among 273 board members found that 57% are increasing their risk appetite, even during disruptive times.
Second, CSCOs should accelerate their company’s digital transformation efforts, which can be crucial tools to help mitigate disruption. For example, new technologies can improve the agility of the supply chain by improving a company’s ability to sense and respond quickly to unanticipated changes in demand and supply.
And third, supply chain executives should extend their partner ecosystem, making an effort to better connect the organization’s supply chain with its partners, customers, manufacturing sites, vehicles and other machines, and other nodes to extend visibility to sense disruption. “The greater the ecosystem, the greater the reach to sense changes and increase options for a path forward,” Poole said.