Supply chain organisations are leaving themselves vulnerable to the uncertain future as many struggle to achieve AI readiness and break down new trade policy barriers, according to Gartner, Inc.

Less than a third (29%) of supply chain organisations have developed at least three of the key five competitive characteristics needed for future readiness, according to a survey from the analysis firm.

These characteristics will be needed for chief supply chain officers (CSCOs) to manage the future drivers of influence on the function, including proving their achievement capability of AI and navigating new trade policies.

Gartner surveyed 579 supply chain practitioners across industry and geography in 2024, indentifying the competitive characteristics as: agility; resilience; regionalisation; integrated ecosystems; integrated enterprise strategy.

The survey analysis identified ‘leaders’ among the respondents as supply chain organisations that have already developed at least three of the five competitive characteristics necessary to address the top five drivers of supply chain’s future.

“Leaders shared a commitment to preparation through long-term, deliberate strategies, while non-leaders were more often focused on short-term priorities,” said Pierfrancesco Manenti, VP analyst in Gartner’s Supply Chain practice.

“Most leaders have yet to invest in the most advanced technologies (e.g. real-time visibility, digital supply chain twin), but plan to do so in the next three-to-five years,” Manenti said. “Leaders see technology as an enabler to their overall business strategies, while non-leaders more often invest in technology first, without having fully established their foundational capabilities.”

The Gartner survey focused on how organisations are preparing for future challenges and to keep their supply chains competitive. As part of the survey, respondents were asked to identify the future drivers of influence on supply chain performance over the next three-to-five years.

Achieving AI capability came out on top (74%), followed by the amount of new ESG regulations and trade policies (67%) and geopolitical conflicts and transitions of power (65%).

Data control (62%) and talent scarcity (59%) were also cited as top influences over the next three to five years.

Gartner’s analysis identified four unique profiles of supply chain organisations, determined by what their leaders deem the most crucial capabilities for empowering their organisations over the next three to five years.

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Each profile places an emphasis on key capabilities such as business model innovation, sustainability, talent, and technology to deliver on future readiness.

Design: Emphasises business model innovation to reduce complexity, focusing on product designs that can be shared across variations. Organisations prioritise simplification, standardisation, and differentiation based on customer and product segmentation to streamline operations and enhance future success.

Durability: Highlights sustainability and risk management as essential for long-term viability, focusing on sustainable sourcing and transparency in initiatives. By minimising environmental impacts, these organisations build resilient supply chains that withstand uncertainties and contribute positively to their ecosystem.

Deferment: Adopts a cautious approach with strategic pauses in investments, focusing on operational excellence and cost containment. Organisations are fast followers, observing others before investing, common in industries where regulatory pressures and lower risk appetites influence strategies.

Decision: Leverages technology and talent to manage complexity, emphasising AI, machine learning, and real-time data analytics. Organisations prioritise scenario planning and real-time visibility, fostering a culture where employees thrive in dynamic environments and support growth through innovation.

“While CSCOs can be successful aligning to any of the four profiles, the data suggests following the Design profile. Its emphasis on business model innovation capabilities could be the most fruitful, as there are more leaders aligned with the Design profile compared to the others,” said Manenti. “Critically important is a commitment to making very focused investments aligned to their profile, something the leading organisations share.”