Today, when supply chains are increasingly complex, procurement leaders are facing a new reality: traditional reactive approaches to risk management are no longer sufficient. A recent Gartner survey reveals that supply disruption has emerged as the number one threat to procurement success, with 42% of procurement leaders ranking it as their top concern.
What Keeps Procurement Leaders Awake at Night?
The comprehensive survey, conducted in mid-2024 among 258 sourcing and procurement professionals, paints a clear picture of the challenges facing modern procurement organizations. Here's what's topping the risk radar:
1. Supply Disruptions: Natural disasters and transportation issues remain the primary concern, largely due to their unpredictable nature and potentially devastating impact.
2. Macroeconomic Factors: Economic downturns and inflation pressures are creating significant headwinds for procurement strategies.
3. Geopolitical and Compliance Issues: These tied for third place, highlighting the growing complexity of global sourcing operations.
The Energy Factor: A Forward-Looking Perspective
Interestingly, leading organizations are showing heightened awareness of emerging risks. They're 2.2 times more likely to identify energy availability and costs as a top concern. With increasing electrification demands and aging grid infrastructure, this forward-thinking approach could prove crucial in the years ahead.
Practical Steps for Modern Procurement Leaders
Based on Gartner's findings, here are three actionable strategies for procurement professionals:
1. Risk Assessment and Prioritization
Don't just identify risks – evaluate them based on:
● Likelihood of occurrence
● Potential impact
● Speed of onset
● Your organization's maturity level
● Industry-specific factors
2. Strategic Supplier Partnerships
● Identify and segment critical suppliers
● Implement proactive safeguarding measures
● Build resilient relationships beyond traditional supplier management
3. Internal Collaboration
● Work closely with strategy teams
● Align with finance departments
● Engage legal teams for compliance matters
Looking Ahead
As Andrea Greenwald, Senior Director Analyst in Gartner's Supply Chain practice, notes, "The reactive measures employed to manage risks over the past four years will not be sufficient for the next four." This insight underscores the need for procurement organizations to evolve from reactive to proactive risk management strategies.
Key Takeaway
The message is clear: establishing a strategic supplier risk management program isn't just good practice – it's essential for survival. Organizations that fail to develop robust risk management capabilities now may find themselves struggling when the next crisis hits.
