The Coronavirus disease (COVID-19) has highlighted the importance of supply chains across the globe. However, it also revealed the differences between a “fit” and a “fragile” supply chain in terms of how they deal with potential disruptions.
According to Gartner, fit supply chains can move ahead after dealing with disruptive events faster than fragile supply chains. One of the most noticeable differences between fit and fragile supply chains is how they treat their long-term strategies and investments during disruptive events. While fit supply chains continue to focus on long term and preserve strategic investments, fragile supply chains often prioritize current-year performance and cut strategic investments.
“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.”
- 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.
- Fragile supply chains find operationally focused disruptions — such as demand and supply shifts — to be most impactful.