Gartner survey reveals AI, ESG and geopolitics top supply chain influences

="margin-bottom:11px">A survey of 579 supply chain practitioners across industry and geography has identified the top 10 drivers of future supply chain success but found only 29% of respondents had sufficiently developed three of the top five competitive drivers needed for future readiness.

“Leaders shared a commitment to preparation through long-term, deliberate strategies, while non-leaders were more often focused on short-term priorities,” said Pierfrancesco Manenti, VP analyst in Gartner’s Supply Chain practice.

Through the survey, taken from July 31 to Oct. 1, 2024, Gartner identified the following competitive characteristics:

• Agility
• Resilience
• Regionalization
• Integrated ecosystems
• Integrated enterprise strategy

Leaders were identified by those firms that had developed at least three of these five characteristics. Yet, even among leaders, most have still not invested although they remain more committed to investment than nonleaders.

“Most leaders have yet to invest in the most advanced technologies (e.g. real-time visibility, digital supply chain twin), but plan to do so in the next three-to-five years,” Manenti noted. “Leaders see technology as an enabler to their overall business strategies, while non-leaders more often invest in technology first, without having fully established their foundational capabilities.”

Respondents were asked to identify the top drivers by influence on the supply chain in the next three to five years. Not surprisingly, artificial intelligence came out on top, named by 74% of respondents. New ESG regulations and trade policies were cited by 67% followed by geopolitical fights/transition for power was third at 65%.

The remainder of the top 10:

• Control over data (62%)
• Talent scarcity (59%)
• Limited availability of resources excluding talent (52%)
• Change in labor demographics (44%)
• Climate change (35%)
• Personalized products/services (28%)
• Subscription-based products/services (13%)

Gartner went on to identify “four unique profiles” of supply chain organizations. This was based on what leaders deemed the “most crucial capabilities for empowering their organizations over the next three to five years.”

Those profiles are:

Design: Emphasizes business model innovation to reduce complexity, focusing on product designs that can be shared across variations. Organizations prioritize simplification, standardization, and differentiation based on customer and product segmentation to streamline operations and enhance future success.

Durability: Highlights sustainability and risk management as essential for long-term viability, focusing on sustainable sourcing and transparency in initiatives. By minimizing environmental impacts, these organizations build resilient supply chains that withstand uncertainties and contribute positively to their ecosystem.

Deferment: Adopts a cautious approach with strategic pauses in investments, focusing on operational excellence and cost containment. Organizations are fast followers, observing others before investing, common in industries where regulatory pressures and lower risk appetites influence strategies.

Decision: Leverages technology and talent to manage complexity, emphasizing AI, machine learning, and real-time data analytics. Organizations prioritize scenario planning and real-time visibility, fostering a culture where employees thrive in dynamic environments and support growth through innovation.

“While CSCOs can be successful aligning to any of the four profiles, the data suggests following the Design profile. Its emphasis on business model innovation capabilities could be the most fruitful, as there are more leaders aligned with the Design profile compared to the others,” said Manenti. “Critically important is a commitment to making very focused investments aligned to their profile, something the leading organizations share.”

The full Gartner research is available here.

SC
MR