Gartner: 73% of companies reshape supply chain networks for resilience

A recent Gartner survey reveals that 73% of companies have made significant changes to their supply chain networks over the past two years. These shifts, which include adding or removing production locations, highlight a growing focus on resilience, agility, and flexibility in response to global disruptions.

Gartner’s survey, conducted between April and May 2024, included 437 senior managers from companies with annual revenues exceeding $250 million across North America, Latin America, Europe, and Asia/Pacific. The results show a clear move away from traditional low-cost supply chain strategies. Instead, chief supply chain officers (CSCOs) are focusing on using different strategies that can better handle disruptions and improve overall performance.

“Supply chain leaders are moving away from an overreliance on low-cost networks and are instead focusing on diversified approaches to mitigate risks and enhance performance,” said Vicky Forman, Senior Director Analyst at Gartner. “While cost-efficiency is still a prominent concern, CSCOs are taking a wider view of the costs associated with the impacts from disruptions and poor levels of resiliency when making network design changes.”

The survey also found that companies are expanding their supply chain footprints as part of a “reglobalization” strategy. About 50% of respondents reported adding new supply locations with existing partners, while 48% pursued new locations with new partners. These changes aim to make supply chains more diverse, save costs, and deal with global political challenges.

Despite the success reported by 90% of companies that made these changes—citing improved service, reduced costs, and enhanced agility—challenges remain. For instance, firms expanding in India face inadequate logistics infrastructure, while North American companies struggle with a shortage of factory workers. Additionally, companies operating in regions like South Asia, Africa, and Central/South America encounter complex regulatory environments.

“There has been a clear trend towards adding network locations in the past two years, but beyond that, there is significant variation in strategies depending on the size, industry, and location of the company in question,” Forman added. “Successful companies have reconfigured their global supply chain networks to take advantage of new incentives while diversifying away from concentration risk.”