A new report from Gartner reveals that supply disruption is the risk at the forefront of procurement leaders’ minds.

Looking back over the last few years, it’s no wonder that procurement leaders are worried. 

From geopolitical conflict and a pandemic to material shortages and inflation, the decade so far has been defined by disruption. It’s also re-defined supply chains, seeing nearshoring and protectionism start to supplant thirty years of globalisation. And none of this looks like it’s about to change any time soon. 

According to a new report from Gartner, supply disruption is currently sitting at the top of procurement leaders’ list of reasons to lose sleep. However, it’s far from the only challenge keeping the industry’s CPOs up at night. 

“CPOs’ concerns about supply disruptions reflect the often unpredictable nature and potentially existential impacts of these events,” Andrea Greenwald, Senior Director Analyst in Gartner’s Supply Chain practice, commented. “They are coming to understand that the reactive measures they have employed to manage risks over the past four years will not be sufficient for the next four.”

Competing anxieties

Gartner’s latest survey was conducted from June through July 2024, and interviewed 258 sourcing and procurement leaders. The data, Gartner claims, intends to help CPOs understand and prioritise the most significant risks that could impede procurement operations, as well as what actions can be taken to manage them effectively.

The responses revealed a strong tendency to worry about supply disruptions. Almost half (42%) of respondents listed it as the biggest risk procurement faces, including natural disasters and transportation issues. According to Gartner, this prioritisation is due to the unpredictability and speed of such disruptions as well as their magnitude. It’s worth noting that the findings are from the months before two severe hurricanes hit the United States. Since then, Helene and Milton threw millions of lives into disarray and severely disrupting supply chains across North America. With hindsight, the data feels almost prescient. 

After supply disruption, macroeconomic factors, including economic downturns, inflation, and other economic factors, rank as the second most significant risk. These factors, while easier to predict, can still have a major influence on long-term procurement strategies.

Geopolitical issues, including tariffs and regulatory changes, and compliance issues, including regulatory and contractual risks, tied for the third most significant risks. 

Responding to the risks 

Gartner’s report recommends that CPOs manage these risks by taking the following steps. 

  • Assess and prioritise risks: CPOs should evaluate the impact of all major risk factors. They should then prioritise them based on their likelihood, impact, and speed. This includes considering organisational maturity and industry-specific factors.
  • Develop and/or strengthen partnerships: Segment suppliers that provide critical goods and services to the organisation. Then they should implement techniques to proactively safeguard the organisation.
  • Navigate internal complexity: Collaborate with strategy, finance, and legal teams to address macroeconomic factors and compliance issues effectively.

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