According to new research from Gartner, just 9% of supply chains expect to achieve revenue gains during times of uncertainty, with those achieving a robust and anti-fragile state more likely to survive AND benefit.
In June 2023, Gartner surveyed 164 supply chain professionals to assess how supply chains perceive and cope with uncertainty, highlighting that antifragility can transform how supply chains perform in uncertain times in support of a growth agenda and provides the ability to gain because of exposure to uncertainty.
The survey revealed that 28% of supply chains expected no gain or loss in revenue, while 63% of respondents expected a loss of revenue due to uncertainty.
Gartner suggests that Chief Supply Chain Officers (CSCOs) must assess their current ability to cope with uncertainty so that appropriate strategies can be applied to evolve towards the anti-fragile supply chain state, with the research stating that supply chains can be in either a fragile, resilient or anti-fragile state.
Commenting on the results, Tim Payne, vice president analyst in Gartner’s supply chain practice, said: “An anti-fragile supply chain starts with the Chief Supply Chain Officer’s mindset.”
He added: “Rather than trying to keep uncertainty out of the supply chain, anti-fragile supply chains embrace uncertainty with the objective of learning, evolving and adapting their capabilities based on their improved knowledge of it.”
The analysis identified a select group of six impactful anti-fragile supply chain capabilities for CSCOs to deploy that are 2.1 to 4.9 times more likely to gain revenue for their organisations when confronted with uncertainty compared with the fragile or resilient versions, consisting of:
- Decision Processes and Collaboration: Enabling dynamic decision processes during uncertainty (4.9x more likely to have a positive revenue impact)
- Calculating ROI for Supply Chain Investments: Assessing the value of investing at different times due to uncertainty (4.5x)
- Managing the Assessment of Uncertainty: Performing a high degree of experimentation on the supply chain to stress test it (3.7x)
- Supply Chain Redundancy: Viewing redundancy (e.g, inventory, capacity, multiple suppliers) as an investment opportunity (3.6x)
- Supply Chain Planning: A focus on end-to-end (E2E) planning policies (probabilities, options, thresholds) in the midterm and accurate functional short-term planning (2.5x)
- Monitoring, Adjustments and Responsiveness: Monitoring at “arm’s length” to intervene only if policies are breached and empower local stakeholders to adjust within policies (2.1x)
Payne continued: “Nearly half of respondents said that more than 50% of their supply chains’ key capabilities are set up to attempt to keep uncertainty outside the supply chain. This over-investment in a barrier to keep uncertainty out actually stifles the ability to learn from it, keeping most supply chains today in a fragile state.”
He concluded: “An anti-fragile mindset changes how CSCOs approach and shape their capabilities, including in areas such as integrated planning, ROI calculations, supply chain redundancy and assessing uncertainty. Our research shows that a select group of anti-fragile capabilities are especially effective in moving a supply chain into the anti-fragile state.”
Gartner’s Director of Advisory, Jeremy Suter, will be speaking at PASA’s ProcureTECH ‘24 – the largest independent eProcurement conference in the ANZ region – which will be held online on 20th & 21st March 2024. Book early to secure your place.
