3 Ways to Navigate Macro and Micro Supply Chain Disruption: Gartner

Chief supply chain officers (CSCOs) can take three vital actions to navigate ongoing global disruption on both the macro and micro level, according to Gartner Inc.

The research and advisory firm said that in this era of increasing supply chain disruptions, CSCOs must look out for both macro and micro disruption to ensure their organisation’s supply chain agility and resilience.

“There are many types of macro supply chain disruptions, including natural disasters, trade wars, political unrest, cybersecurity breaches, and other events,” said Chris Poole, Practice VP with the Gartner Supply Chain practice.

“In addition to managing those macro disruptions, CSCOs must also pay close attention to micro disruptions, such as new entrants to the market, emerging technologies and internal organisational changes,” Poole said.

Gartner suggests three actions for CSCOs to take in dealing with macro and micro disruptions.

Understand Risk Appetite

Gartner defines risk appetite as “the amount of risk a company is intentionally taking to achieve their strategic objectives”. This outlines the number and types of risks an organisation is willing to take and states the performance boundaries for the strategic objectives.

A 2022 Gartner survey revealed that 57 per cent out of 273 board members have increased their risk appetite even during disruption.

“It’s crucial for CSCOs to understand where their company is deliberately increasing risk, so they can manage those additional risks in line with other disruptions. Risk management has never been more important,” Poole said.

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Leverage Digital Transformation

Gartner said digital transformation can help mitigate disruption and improve an organisation’s supply chain agility and resilience.

Emerging technology can increase the ability to respond quicky to unanticipated changes in demand and supply. It also allows CSCOs to quickly adapat to structural changes by modfying strategies, products and technologies.

“CSCOs should evaluate which frameworks, capabilities and technologies are best suited to progress their supply chain maturity so that risks can be prioritised, planned for, and controlled more effectively,” the research and advisory firm said.

Connect the Digital Ecosystem with Partners

Gartner also said it is critical to build a digital ecosystem that connects an organisation’s supply chain with their partners, customers, manufacturing sites, vehicles and other machines, and other nodes to extend visibility to sense disruption.

“The greater the ecosystem, the greater the reach to sense changes and increase options for a path forward,” Poole concluded.