Gartner Survey Reveals Supply Disruptions as the Biggest Risk to Procurement Success

Stamford, Connecticut, October 17, 2024

42% of Procurement Leaders See Supply Disruptions as Greatest Threat; Macroeconomic, Geopolitical and Compliance Risks Also Highlighted

A Gartner survey reveals that supply disruptions pose the greatest threat to procurement success in the future.

The survey, conducted between June and July 2024 among 258 procurement leaders, aims to help Chief Procurement Officers (CPOs) understand and prioritize the most significant risks that could impede procurement operations, as well as what measures can be taken to effectively manage these risks.

“The concern of CPOs over supply disruptions reflects the unpredictable nature of such events and their potential far-reaching impacts,” said Andrea Greenwald, Senior Director Analyst at Gartner Supply Chain Practice. “They are recognizing that reactive risk management approaches used in the past four years will be insufficient for the next four.”

Greenwald added: “The need to establish strategic supplier risk management programs has never been more critical; companies failing to develop such plans now will face significant challenges when the next crisis hits.”

Around 42% of procurement leaders surveyed consider supply disruptions, including natural disasters and transportation issues, as the primary risk to procurement success. This prioritization stems from the unpredictability and rapid impact of these disruptions.

Macroeconomic factors, such as economic recession, inflation, and other economic considerations, were listed as the second most important risks. Although more predictable, these factors can significantly influence long-term procurement strategies.

Geopolitical issues, including tariffs and regulatory changes, along with compliance concerns like regulations and contract risks, were ranked third in importance.

The survey also highlighted that leading organizations are 2.2 times more likely to identify energy supply and costs as major risks compared to other companies; this indicates a focus on emerging future risks. With electrification driving up demand for electricity, the vulnerability of grid infrastructure makes meeting energy demands a focal point. Therefore, leading organizations recognize access to energy will become a significant risk in the future.

Based on survey analysis, Gartner recommends that CPOs:

Evaluate and Prioritize Risks: CPOs should assess the impact of all major risk factors and prioritize them based on their likelihood, impact, and speed. This includes considering organizational maturity and industry-specific factors.
Develop and/or Strengthen Partnerships: Classify suppliers that provide critical goods and services to the organization and implement technologies proactively to safeguard the organization.
Navigate Internal Complexity: Collaborate with strategic, financial, and legal teams to effectively address macroeconomic factors and compliance issues.

About Gartner Supply Chain Practice

Gartner Supply Chain Practice provides actionable, objective insights for supply chain leaders and their teams so they can respond to disruptions through leading-edge supply chain management practices and innovate for the future. For more information, visit the Gartner website. Follow news updates from Gartner Supply Chain Practice and join the conversation on LinkedIn and X using #GartnerSC. Visit the Gartner Supply Chain Newsroom for additional insights.