- More than three-quarters (77%) of companies said they are investing in deeper and more collaborative supplier relationships to improve resilience and agility, according to Gartner's "Future of Supply Chain: Crisis Shapes the Profession" report.
- Survey respondents also listed diversifying their supplier base as a strategy to establish more business resilience, with 63% and 23% reporting they are already investing and plan to invest within two years, respectively.
- The single greatest technological investment across the board was for supporting supply chain visibility and mapping. Currently, 66% of companies are investing in the technology, with 25% planning to invest within the next two years. Only 9% of respondents reported no plans to invest over the next two years.
Supply chain resilience has taken on added importance since the onset of the pandemic, as companies tried to quickly implement plans to survive and rebound.
At the beginning of the pandemic, when established procurement contracts weren't always enough to ensure purchase orders were filled, the companies that did manage to secure materials were the ones that had deeper relationships with their suppliers.
Now, a year in, the buyer-supplier relationship is key to keeping goods flowing and ensuring companies have supply chain transparency. Having that level of understanding is at the root of ensuring solid contingency plans.
One lesson from last year is don't wait to form a contingency strategy once a disruption occurs — by then it's too late. Experts advise mapping out product lines beforehand through information sharing between buyer and supplier.
VF Corporation, the parent company of The North Face and Timberland, created a traceability mapping program that discloses tiers 1 through 4 of product supply chains. The data collection process allows it to trace its supply chain from end-to-end, covering raw-materials acquisition to product distribution. The technology marks improvement in transparency of the apparel supply chain, an industry known for its poor visibility into upstream supply.
Procurement departments' commitments to resilience and agility will likely remain in the coming years as companies invest in multisourcing, localized sourcing, and visibility and risk-sensing technology, according to the report.
Companies are creating sourcing stability with backup suppliers. McKinsey noted in a report late last summer, "Shocks that affect global production are growing more frequent and more severe."
For the first time, surveyed organizations indicated more supply chain jobs being taken out of China than being added, with many moving to India, Mexico and Vietnam — indicative of the current trend of expanding supplier bases beyond a single source.
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