5 of 6 supply chains take more than a day to adapt to disruptions

Progress is slow in making supply chains more flexible and resilient although there is optimism towards supply chain orchestration tools as a key enabler for the future, according to a new IDC study.

Research was conducted in December 2023 by IDC and commissioned by Kinaxis, surveying 1,800 supply chain leaders across North America (United States and Canada), Europe (United Kingdom, France, and Germany), and the Asia-Pacific region (Japan, Taiwan, India, and Australia).

Results show that less than one-fifth (17%) of global supply chain leaders say their companies can respond to disruptions within 24 hours. 

Highlighting their widespread frustration, two-thirds (67%) of respondents admit they are not “very satisfied” with their response time. 

Kinaxis said the findings expose the harsh reality that most are struggling to keep their operations agile and adaptable amid an onslaught of disruptions from geopolitical conflicts, natural disasters, and other volatility. 

While the average crisis response time is a troubling five days, the survey shows performance varies across industries. 

In the oil and gas sector, for example, 28% of respondents say they can mount a response within a day, compared to 15% in life sciences and 14% in aerospace.

“It’s increasingly evident that supply chains have immense influence over the success or failure of businesses. The statistic revealing that 83% of supply chains are unable to adapt to disruptions within a 24-hour timeframe highlights the urgent need for increasing resilience and managing risk management across all industries especially in Asia,” said Phillip Teschemacher, APAC president at Kinaxis. 

“In this landscape, there lies a significant opportunity for improvement. Companies can work on improving visibility, increasing collaboration and advancing towards orchestration to enable chief supply chain officers to automate decision-making across the entire enterprise,” said Teschemacher.

Although respondents in all regions are overwhelmingly dissatisfied with their business’ ability to withstand and respond to supply chain shocks, they remain optimistic about technology’s potential to turn the tide, with 97% saying better orchestration tools would have a modest (44%) or significant (53%) impact on supply chain performance. 

Findings also show that industrial respondents rate their resiliency highest (47%), while retail (29%) and aerospace (27%) rate themselves lowest.

Among consumer product respondents, 42% of consumer product respondents rated their supply chain orchestration as mature, the highest among all verticals.

A quarter of respondents plan to move to new technologies in the next year to improve resilience.

One-third want supply chain orchestration platforms that offer artificial intelligence or generative AI capabilities.

Close to two-thirds  (63%) view their supply chain as some form of competitive advantage over the next 12 months, but it drops to 48% across the next 1-3 years.

Further, 37% said the biggest roadblock to adopting a supply chain orchestration application was not finding the right vendor solution.