While organizations are shifting toward balancing cost efficiency and supply chain resilience, most remain unprepared to manage ongoing disruption, according to research from the Institute for Supply Management (ISM) and Amazon Business.
While 71% of organizations report balancing cost and risk now drives procurement strategy, only 45% say they are prepared for supply chain disruptions, and 65% still rely on manual reporting to gather supply chain data, highlighting a widening gap between strategy and execution. Those statistics come from a survey of 425 global supply chain professionals, detailed in the white paper “Balancing Cost and Risk: An Operating Model for Supply Chains.”
The results reveal a strategic gap as organizations face continued geopolitical, economic and operational volatility, the researchers said. “Organizations today are operating in an environment where disruption is no longer an exception. It is an ongoing reality,” said Debbie Fogel-Monnissen, ISM Interim CEO. “Leaders recognize the need to balance cost with resilience, but our research shows many are still building the capabilities to act on that insight. Closing that gap is essential to protecting performance and ensuring continuity.”
One reason for the gap is that the study shows uneven adoption of procurement technologies and risk evaluation practices. While most organizations use e-procurement platforms (58%) and supplier portals (51%), more advanced tools such as predictive analytics and risk monitoring remain less widely implemented. Specifically, 64% of organizations use business impact analysis, while fewer report employing more advanced methods such as risk matrices (49%) and scenario planning (46%), underscoring gaps in capability maturity.
To answer that challenge, the research points to an emerging supply chain operating model centered on risk-adjusted decision-making. Organizations are moving toward a broader, “total cost of ownership” approach that incorporates service performance, process efficiency, and disruption exposure alongside price. This model is supported by four key practices:
- Diversifying supply sources
- Improving visibility across supply networks
- Accelerating decision-making cycles
- Expanding scenario planning capabilities
