Leaders look to revamp supply chains following recent disruptions
A new study by R.R. Donnelley & Sons Company (RRD) reveals 93% of supply chain leaders are at least somewhat confident in their supply chain’s resilience against future disruptions, with the majority (66%) feeling very confident. Despite recent challenges like geopolitical instability alongside the lingering effects of the COVID-19 pandemic, the report highlights key strategies businesses are using to build stronger, more adaptive supply chains. The report also shows that nearly all supply chain leaders (97%) plan to re-engineer their supply chains within the next two years, with 30% planning a “total and complete re-engineering.”
RRD’s Future-Ready Supply Chain Report, the company’s second-annual supply chain industry report, compares how over 300 supply chain decision-makers are approaching these challenges. Today, supply chain leaders are under immense pressure to build resilient operations capable of weathering various disruptions. The report highlights four key areas where organizations are focusing their efforts: risk management, technology adoption and innovation, supply chain re-engineering, and outsourcing partnerships.
“Supply chain leaders are not just adapting, they are completely transforming their approaches to secure a more stable future,” said John Marrow, president, Supply Chain Solutions, RRD. “Our report shows that while challenges remain, the right mix of innovation, risk management and proactive re-engineering can turn these challenges into opportunities for growth and resilience.”
Risk is top of mind for supply chain leaders
The U.S. presidential election is a key focus for many Americans, and similarly, over three-quarters of supply chain managers are expecting that the outcome of the upcoming election would have an impact on global supply chains.
While a shortage in human talent and domestic supply chain disruptions are prominent concerns, the Future-Ready Supply Chain Report found that inflation and price fluctuations stand out as what managers consider their biggest challenges for the near future. Supply chain leaders are responding to risk by implementing more conventional diversification strategies, including:
- Developing new relationships with alternative suppliers (69% of respondents)
- Increasing sourcing from domestic suppliers (67%)
- Dual sourcing with suppliers who are geographically dispersed (52%)
To proactively manage risks, nearly half (48%) of respondents report that they are “constantly” updating their formal evaluation of supply chain risk.
Supply chains aren’t done innovating
Artificial Intelligence (AI) is undoubtedly gaining traction, but RRD’s latest report finds supply chain leaders are investing more in other technologies, including real-time visibility, scanning codes, the Internet of Things, and predictive analytics. When leveraging AI, decision-makers reported using the technology in their supply chain activities for purposes including:
- Supply forecasting (59% of respondents using AI)
- Visibility and tracking (56%)
- Optimizing operations (56%)
For 2025, 57% of respondents also reported considering the use of AI for demand forecasting to enhance kitting. To improve the responsiveness of their fulfillment operations, the majority of respondents (60%) plan to implement advanced order management systems as their top strategy over the next two years.
As supply chain leaders work to innovate their supply chains, sustainability continues to be a point of focus for many. Among respondents listing sustainability as an activity their organization is pursuing in the future, the top three focus areas included logistics (50%), sourcing of components (41%) and/or raw materials, and supplier relationships (41%).
Supply chain revamps are on the horizon
Amidst a variety of challenges including rising costs and escalating customer demands, RRD’s latest report shows that the majority of leaders are looking to overhaul their supply chain. The data showed top reasons for re-engineering included customer demand for a wider range of products (43% of those re-engineering), rising transportation costs (42%), and enhanced supply chain visibility and control (42%). Supply chain leaders also shared that their top obstacles to supply chain re-engineering include high upfront costs, potential disruption to their current operations, and integration challenges with existing systems.
Companies are looking outward for production
RRD’s Future-Ready Supply Chain Report shows that outsourcing is becoming a strategic tool for organizations seeking to increase speed, scale, and better quality. Over the next two years, 63% of respondents expect their organization to outsource more of its production processes. The report highlights that speed is the primary reason top-performing companies outsource, though concerns over rising material costs and quality control remain prominent.
For more information on RRD’s end-to-end supply chain solutions, packaging, and labels capabilities, meet with RRD at PACK EXPO International, November 3-6, 2024 (Packaging & Labels booth W-23023; Healthcare Solutions booth W-20046.)
To read the full report, visit: rrd.com/future-ready
Methodology
RRD surveyed 300+ supply chain leaders and managers based in the U.S. or based outside the U.S but representing an American company. All respondents are involved in decisions for supply chain management, inventory management, logistics, and/or the transportation and distribution of physical goods.
