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12/09/2021

Shortages and Disruptions Are Top Supply Chain Challenges

Retailers have been saddled with supply chain issues throughout the COVID-19 pandemic, and nearly half of supply chain professionals say shortages and disruptions have been the top challenge.
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Supply chain

That’s according to a recent survey of supply chain pros from SAP and Regina Corso Consulting. Just under half––49%––said shortages and disruptions are top of mind. The survey was conducted between Oct. 15-25, 2021, on a sample of 210 U.S.-based employees who work in the supply chain at companies with at least 500 employees.

“Supply chain disruptions aren’t a new challenge, but they’ve been dramatically compounded and lasting due to ongoing shortages and delays caused by the pandemic,” said Etosha Thurman, chief marketing and solutions officer, Intelligent Spend and Business Network, SAP. “To navigate these unpredictable circumstances, supply chain leaders must strategically leverage procurement to effectively manage supplier relationships, mitigate customer frustrations, control costs and ensure business resiliency.”

Supply chain professionals also noted other issues kept them up at night in the survey, including sustainability (28%), reducing costs and/or saving money (27%), consumer feedback (21%), digital transformation (20%) and regulatory compliance (18%).

While just 28% marked sustainability as a top challenge, 91% said their company has specific sustainability goals or objectives. Another 95% said procurement plays a significant role in achieving those sustainability goals.

Amid the ongoing supply chain crunch, procurement has taken on a more strategic role to mitigate the supply chain issues. Half of respondents said it is helping alleviate supply chain challenges by improving supply chain transparency, while 48% said it is helping develop better relationships with suppliers; 45% said it is helping diversify suppliers for greater resiliency; 33% said it is helping adapt payment terms to improve trading partner liquidity; and 21% said it is helping reskill talent to address higher-level business priorities.

Consumers have a role to play in alleviating supply chain stressors, as well. Allowing more time for fulfillment was the top solution among supply chain pros (54%). Another 46% said consumers should buy more local goods and order items earlier; 33% said consumers should be willing to pay more to account for higher supply chain costs; and 32% said consumers should have more empathy and understanding for the delays.

“If post-pandemic supply chains are to be resilient, they must be sustainable. It’s not enough to just track and extoll green virtues, sustainability must become part of the way that supply chains are run,” said Simon Ellis, program vice president at IDC. “On the other end, the growth of e-commerce and consumer expectations for ‘next day’ delivery often runs counter to sustainable fulfillment and carbon footprint. There will have to be a rebalancing or rationalization about the way that people consume: ‘do I really need the product the next day?’”