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Despite the disruption of global supply chains by COVID-19, regionalization is a low priority among supply chain professionals.
According to a new survey of more than 1,300 supply chain professionals from Gartner Inc., a leading 89% of respondents plan to invest to make their supply chains more agile in the next two years. Another 87% plan to invest to make their supply chains more resilient in the next two years. Three-quarters of respondents believe that the additional costs caused by investments in resilience and agility will be covered by the supply chain budget.
Gartner defines resilience as the ability to adapt to structural changes by modifying supply chain strategies, products and technologies; and agility as the ability to sense and respond to unanticipated changes in demand or supply quickly and reliably, without sacrificing cost or quality.
The survey also examined respondent attitudes toward supply chain globalization. Fifty-six percent of respondents believe automation will enable them to make onshore manufacturing economically viable. Slightly more than half (52%) said national interests and pressure to favor domestic operations will increase in influence on future supply chain decisions. Nevertheless, fewer than one-third (30%) of respondents are shifting from a global supply chain model to a more regionally-based one.
“Ultimately, the right balance between investments in resilience and agility, and cost-optimization depends on each organization’s individual circumstances, including their financial strength, market position, appetite for risk and external factors such as regulatory requirements or supply chain constraints,” said Geraint John, VP analyst with the Gartner supply chain practice. “If chief supply chain officers choose their investments wisely, they can expect to see positive results as soon as the next disruption.”