Gartner Survey Shows Supply Disruption is Top Risk to Procurement’s Future Success

The survey, conducted from June through July 2024 among 258 sourcing and procurement leaders, was designed to help chief procurement officers (CPOs) understand and prioritize the most significant risks that could impede procurement operations, and what actions can be taken to manage them effectively.

“CPOs’ concerns about supply disruptions reflect the often unpredictable nature and potentially existential impacts of these events,” said Andrea Greenwald, Senior Director Analyst in Gartner’s Supply Chain practice. “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.”

“The necessity of establishing a strategic supplier risk management program has never been more critical, as companies that neglect to develop such a program now will struggle significantly when the next crisis arises,” added Greenwald.

Forty-two percent of the procurement leaders surveyed identified supply disruptions, such as natural disasters and transportation issues, as the foremost risk to procurement success (see Figure 1). This prioritization arises from the unpredictability and velocity of such disruptions as well as the magnitude of their impact.

The survey also highlighted that leading organizations are 2.2 times more likely to view energy availability and cost as a top risk; indicating a focus on future emerging risks. As electrification drives demand for power, brittle grid infrastructure raises concern about whether the energy supply can keep pace. Therefore, leading organizations recognize that access to energy will become a significant future risk.

Based on the survey analysis, Gartner recommends that CPOs:

• Assess and prioritize risks: CPOs should evaluate the impact of all major risk factors and prioritize them based on their likelihood, impact, and velocity. This includes considering organizational maturity and industry-specific factors.

• Develop and/or strengthen partnerships: Segment suppliers that provide critical goods and services to the organization and implement techniques to proactively safeguard the organization.

• Navigate internal complexity: Collaborate with strategy, finance, and legal teams to address macroeconomic factors and compliance issues effectively.