A lot of companies remain locked into an outdated model that prevents them from achieving resiliency in their supply chain and will stay in this model likely until 2026, according to Gartner. This analysis has indicated that only a few companies are focusing on accuracy in 2023 and managing uncertainty in their supply chains. Until companies start to focus on managing uncertainty in their supply chains then true resiliency within supply chains will not be accomplished.
“Companies are scrambling to add resiliency to their supply chain programs today, but ironically they are taking actions that may lead to more fragile and rigid supply chains based on outdated ‘steadier state’ models,” said Tim Payne, vice president analyst with Gartner’s Supply Chain practice. “A current focus on ever improving accuracy results in supply chains unable to cope with today’s uncertainties and simply reinforces their vulnerabilities.”
From Gartner:
- Drop forecasting-based models and enable the company’s supply chain to take full advantage of its uncertainty mitigation tactics by not constantly propagating its demand signal through the supply chain. Change the planning focus onto uncertainty rather than exclusively on the plan's accuracy.
- Drive from unknown uncertainty toward known variability by utilizing AI and ML for different, multiple predictions.
- Begin to build a digital supply chain twin (DSCT) by identifying key model parameters that would help to improve the resiliency of decisions.
- Assess supply chain decisions using uncertainty metrics rather than accuracy metrics, by deploying KPIs that describe the supply chain’s capability to tolerate uncertainty and the “probability of execution” of relevant supply chain decisions.
