**London**: Businesses are increasingly facing challenges in supply chains due to disruptions and outdated processes. Sam Gonzalez from DecisionPoint highlights the importance of identifying blind spots and leveraging technology to navigate evolving regulatory landscapes and ensure ethical compliance across extensive supplier networks.
Businesses across the globe are increasingly confronting a myriad of challenges stemming from relentless disruptions, tariff uncertainties, and a rapidly shifting geopolitical landscape. These issues have compelled many companies to address supply chain complexities without a comprehensive understanding of the vulnerabilities inherent within their own operations.
Sam Gonzalez, the director of enterprise solutions for supply chain visibility technology firm DecisionPoint, remarked on the current state of supply chains, indicating that it is becoming increasingly difficult to find a company that does not possess blind spots. “You would honestly be hard-pressed to find a company that doesn’t have some blind spots,” he said.
Gonzalez highlighted a notable contrast within supply chains, as cutting-edge technology holds the potential to streamline shipment management at various stages, yet many businesses continue to rely on outdated tools and processes. This reliance on archaic methods, ill-equipped to handle the disruptions that have become commonplace in recent years, exposes firms to significant financial repercussions. These blind spots hinder timely and efficient navigation of supply chain challenges, leading to substantial costs. Research from the McKinsey Global Institute suggests that the average company may lose nearly half of one year’s profits over the span of a decade due to a single prolonged and severe supply chain disruption. Factors contributing to these losses include inefficient routing, inaccurate data, and ineffective inventory management—elements that fail to adapt to shifting circumstances.
“Any time that you’re having to pivot quickly, it compounds any issues that you have — it becomes exponential,” Gonzalez elaborated, illustrating how traditional crisis management strategies struggle to keep pace with contemporary disruptions. The rapid demands for change can render previous coping mechanisms ineffective.
The challenge is exacerbated by a diminishing visibility beyond first-tier suppliers. According to a 2024 McKinsey survey of 88 senior supply chain executives, only 30% reported strong visibility beyond their first tier, a decline from 37% in the previous year and 56% in 2022. Since major disruptions often originate deep in the supply chain, inefficiencies may remain hidden for extended periods, incurring costs that businesses may not immediately recognise.
The complexity of modern supply chains raises regulatory and humanitarian concerns as well. Many retailers manage extensive networks of suppliers, frequently numbering in the hundreds or thousands, rendering it nearly impossible to guarantee adherence to ethical labour practices and varying environmental regulations. According to the McKinsey survey, a mere 9% of executives indicated that their supply chains comply with the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which begins enforcement in 2026, mandating large companies to identify and mitigate potential human rights violations along their supply chains. Furthermore, around 30% of respondents acknowledged that they are either behind or “significantly” behind in their compliance efforts with the directive.
Addressing these vulnerabilities often necessitates a comprehensive technological overhaul, compelling businesses to reassess nearly every aspect linking to their supply chains, including warehouse management systems, accounting software, predictive analytics, and inventory tracking. Nevertheless, there exists the danger of succumbing to the allure of the latest technological trends, prompting organisations to think strategically about their actual needs amidst emerging innovations.
“It’s really easy to go to a show or read an article about AI, robotics, RFID, whatever it is, and get fixated on that being the solution to your problem,” Gonzalez advised. He emphasised the importance of prioritising the core issues at hand and remaining open to various potential solutions.
The intricacies of modern supply chains continue to evolve in tandem with global economic and regulatory landscapes, presenting ongoing challenges for companies striving for resilience and efficiency amidst unprecedented levels of disruption.
Source: Noah Wire Services
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