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STAMFORD, Conn., April 28, 2021

Gartner Says “Fit” Supply Chains Create New Competitive Advantages During Disruption While “Fragile” Organizations Struggle

Disruptions to Become Long-Term Trend for Supply Chain Leaders

The COVID-19 pandemic revealed key differences between “fit” and “fragile” supply chain organizations with regards to how they deal with disruption, according to Gartner, Inc. The most fragile focus on short-term survival, while the fittest supply chain organizations see disruptions as inflection points to improve the value that supply chain provides to the business.

“Disruption is not a short-term situation, but a long-term trend that will most likely accelerate as we face climate change impacts, global power balance shifts and more,” said Simon Bailey, senior director analyst with the Gartner Supply Chain practice. “In the future, disruptions will occur more frequently and supply chains must be able to deal with whatever is coming next. Some supply chain leaders have understood that already and prepared their organization accordingly.”

“Fit” supply chains are able to move ahead of the competition after dealing with the high-impact events, while “fragile” supply chains fall behind.

Fit Supply Chains Focus on Structural Shifts

For fit supply chains, the most impactful disruptions are those that involve fundamental, structural shifts in the context in which the supply chain operates, such as new technologies and changing competitive dynamics.

By contrast, fragile supply chains find operationally focused disruptions — such as demand and supply shifts — to be most impactful. While focusing on these operational challenges, they lose sight of their long-term goals and overlook how structural shifts could help them maximize the value and thus they fall behind the fit supply chains.

“It’s not the type of disruption that determines the supply chain impact. The type of supply chain determines the impact of the disruption,” Mr. Bailey said. “Fit supply chains excel at focusing on the structural disruption and proactively translating those into competitive advantage. They are able to change their organizational design to capitalize on structural shifts and create new value for their customers.”

Fit Supply Chains Maintain Their Long-Term View and Investments

One of the most visible differences between the approach of fit and fragile supply chains to disruption is how they treat their long-term strategies and investments. Most fit supply chains maintain focus on the long term and preserve strategic investments during disruptive events, while fragile supply chains prioritize current-year performance and cut strategic investments.

“During a disruption, supply chain leaders should try to avoid emergency cost cutting that put both short- and long-term effectiveness at risk. Instead, cost optimization should be an ongoing effort in the supply chain and cost decisions must take all the operating outcomes across fulfillment, reliability, risk and growth into consideration,” Mr. Bailey concluded.

Gartner clients can learn more in “Gartner’s Disruption Management Survey Reveals What Differentiates Fit From Fragile Supply Chains”.

About Gartner Supply Chain Symposium/Xpo

Gartner Supply Chain Symposium/Xpo is the most important gathering of CSCOs and supply chain executives. Supply chain leaders will discover the must-have insights, strategies and frameworks to build the sustainable, societal and profitable supply chains required for a dynamic world.

Upcoming dates for the Gartner Supply Chain Symposium/Xpo include:
September 13-15: London, U.K.

October 25-27: Orlando, Fl.

About the Gartner Supply Chain Practice

The Gartner Supply Chain Practice brings together the most relevant analysis, peer-based best practices, metrics and data across Gartner and offers supply chain leaders a platform to make the choices that will drive their business forward. Additional information is available at https://www.gartner.com/en/supply-chain. Follow news and update from the Gartner Supply Chain Practice on Twitter and LinkedIn using #GartnerSC.

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About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and an objective resource for more than 14,000 enterprises in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.