Only 9% of Supply Chain Organizations Expect Revenue Gains During Uncertain Times

Supply chains are increasingly looking to develop resilience, but a new survey and research from Gartner finds that those that develop an antifragile framework not only survive, they thrive.

According to Gartner research, only 9% of supply chain organizations expect to achieve revenue gains due to uncertainty, but those organizations that adopt an antifragile state are 2.1 to 4.9 times more like to gain revenue during these times.

“An antifragile supply chain starts with the chief supply chain officer’s mindset,” said Tim Payne, vice president analyst in Gartner’s Supply Chain Practice. “Rather than trying to keep uncertainty out of the supply chain, antifragile supply chains embrace uncertainty with the objective of learning, evolving and adapting their capabilities based on their improved knowledge of it.”

Payne previously wrote a blog on an antifragile supply chain. In that blog, it is defined as able to thrive under uncertainty. A resilient supply chain is defined as able to survive some uncertainty to a certain level for a certain period of time, and a fragile supply chain is one that is unable to survive intact under uncertainty.

“Rather than trying to keep uncertainty out of the supply chain, antifragile supply chains embrace uncertainty with the objective of learning, evolving and adapting their capabilities based on their improved knowledge of it.”

Gartner used Nassim Nicholas Taleb’s definition of antifragility from his 2012 book Antifragile: Things That Gain From Disorder.

In the latest survey of 164 supply chain professionals conducted in June of this year, Gartner found that 28% of supply chains expected no gain or loss in revenue, while 63% of respondents expected a loss of revenue due to exposure to uncertainty.

“The inability to cope with uncertainty is driven by a misallocation of initiatives to the wrong strategy,” said Payne. “Nearly half of respondents said that more than 50% of their supply chains’ key capabilities are set up to attempt to keep uncertainty outside the supply chain. This overinvestment in a barrier to keep uncertainty out actually stifles the ability to learn from it, keeping most supply chains today in a fragile state.”

Gartner advises chief supply chain officers to assess their current ability to cope with uncertainty and develop strategies to adjust.

“An antifragile mindset changes how CSCOs approach and shape their capabilities, including in areas such as integrated planning, ROI calculations, supply chain redundancy and assessing uncertainty,” said Payne. “Our research shows that a select group of antifragile capabilities are especially effective in moving a supply chain into the antifragile state.”  

The most impactful antifragile supply chain capabilities identified are:

• Decision processes and collaboration: Enabling dynamic decision processes during uncertainty (4.9x more likely to have a positive revenue impact).
• Calculating ROI for supply chain investments: Assessing the value of investing at different times due to uncertainty (4.5x).
• Managing the assessment of uncertainty: Performing a high degree of experimentation on the supply chain to stress test it (3.7x).
• Supply chain redundancy: Viewing redundancy (e.g., inventory, capacity, multiple suppliers) as an investment opportunity (3.6x).
• Supply chain planning: A focus on end-to-end (E2E) planning policies (probabilities, options, thresholds) in the midterm and accurate functional short-term planning (2.5x).
• Monitoring, adjustments and responsiveness: Monitoring at “arm’s length” to intervene only if policies are breached and empower local stakeholders to adjust within policies (2.1x).

More information on the research is available to Gartner clients in  Supply Chain Executive Report: The Antifragile Supply Chain — Thriving Due to Uncertainty. Nonclients can learn more in the webinar: Antifragile Supply Chain – Thriving Due to Uncertainty.

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