Gartner: Supply Disruption Tops Procurement Risks – Technologist

A recent survey Gartner highlights supply disruption as the most significant risk facing procurement leaders, with 42% of respondents identifying it as a top threat to future success. Conducted between June and July 2024, the survey included 258 sourcing and procurement leaders and aimed to shed light on the key risks impacting procurement operations.

Andrea Greenwald, senior director analyst at Gartner, emphasised the unpredictability and severe impacts of supply disruptions, stating, “CPOs’ concerns about supply disruptions reflect the often unpredictable nature and potentially existential impacts of these events.” She warned that traditional reactive measures may no longer suffice in the coming years. Greenwald further stressed the urgency of establishing strategic supplier risk management programs, noting, “Companies that neglect to develop such a program now will struggle significantly when the next crisis arises.”

Figure 1: Top risks to procurement’s future success (Sum of top 3 ranks)

Following supply disruptions, macroeconomic factors—such as economic downturns and inflation—ranked as the second most critical risk. Geopolitical issues, including tariffs and regulatory changes, along with compliance risks, were tied for third place. The survey also revealed that leading organisations are 2.2 times more likely to view energy availability and costs as top risks, highlighting the growing concern over energy supply in the face of increasing electrification demands.

To address these risks, Gartner recommends that Chief Procurement Officers (CPOs) take a proactive approach by assessing and prioritising risks based on their likelihood and impact. Developing strong partnerships with critical suppliers and collaborating with internal teams across strategy, finance, and legal functions are also essential steps to navigate the complexities of macroeconomic and compliance challenges.

The survey serves as a wake-up call for procurement leaders to adapt their strategies in anticipation of future disruptions.