What are Gartner's three top supply chain concerns?

23 October 2020

Firms need to address supply chain concerns around resiliency, digital infrastructure, upskilling, and increased talent management, according to Gartner. 

Sessions at Gartner's Supply Chain Symposium explored operational areas managed by chief supply chain officers (CSCOs) that need to adapt to meet challenging global impacts, from evolving trade challenges to more digitally-focused work environments.

Thomas O’Connor, senior director analyst at the Gartner Supply Chain Practice, said prior to Covid “CEOs were already planning for reduced hiring, an emphasis on cost optimisation, but also an increase in digitisation efforts”.

He added that many CSCOs expected an economic downturn in 2020 to trigger organisational changes but the pandemic has been the extra “prompt” for businesses to reassess their operating models.

Gartner’s three supply chain concerns are:

1. Changing global structures

The top concern is the challenge posed by changing global ecosystems, including trade trends and increased tariffs from events such as the US and China trade war, Brexit and Covid-19.

While many businesses were considering supply chain restructures before the pandemic, Gartner recommended that, as a consequence of significant global changes, now is the time to “present their plans to become more resilient to the C-Suite” to ensure businesses adapt and evolve accordingly.

According to a Gartner survey conducted after the Covid outbreak, only 21% of supply chain leaders have found they have a “highly resilient” supply chain.  

O’Connor said: “CSCOs must explain that a supply chain needs to be resilient, but also work economically. Balance is key. Resiliency can always be improved, but there’s trade-offs. More resiliency often means a supply chain organisation that is less lean, less agile and holds more inventory.”

2. Digital infrastructure

CSCOs are advised to address the need for increased digital investments. Gartner said firms had expanded investments “beyond pre-Covid budgeted levels”. 

It recommended ensuring any investments align with their CEO’s critical priorities, including growth, financial stability, cost management and risk management.

O’Connor said: “CSCOs must make clear that today’s digital progress secures the options of tomorrow. For example, supply chain organisations with the right digital capabilities can act as the central nervous system of the business that senses risks and opportunities and enables real-time action.”

3. Workforce improvements

The third most important concern is the need for “structural shifts in the workforce”, with Covid-19 causing a “hiring squeeze” and highlighting demand for increased skills in areas such as digitisation and contract management.

O’Connor added: “Training employees according to a clearly-defined vision is critical to gain buy-in from leadership and staff alike. CSCOs can perform a gap analysis to understand where the organisation lacks key skills and develop a strategy for either hiring those skills or upskill the existing work population.”

Developing and training supply chain talent is vital “to remaining competitive in an ever-changing environment”.

As many companies strive to survive during challenging times, businesses need to ensure they invest in their employees to ensure an agile and efficient workforce. 

This includes increased training, career development coaching, and networking across sectors to break down silos and inform on decision making, especially in this time of isolation. 

Caroline Chumakov, principal analyst at Gartner, said: “Despite the disruption caused by the Covid-19 pandemic, many companies are moving forward with their digital objectives or even accelerate the automation of their supply chain.

“This means that the war for talent with skills in fields such as machine learning and artificial intelligence will continue. Rather than fighting to compete, many CSCOs will look to make do with what they have and work to improve the digital dexterity and data literacy of their existing workforce.”

She added: “If CSCOs want to keep up with their companies’ digital ambitions they need to make sure that their employees are properly trained to work in a digital environment.”

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