Preparing For the Worst is the Best Logistics Strategy

By David Gonzalez, Matthew Beckett, Brian Whitlock | March 08, 2022 | 0 Comments

Supply ChainPower of the ProfessionDirect Material Sourcing and Supply Chain ServicesManufacturing Operations Strategy and PerformanceSupply Chain Strategy, Leadership and Governance

Despite best-intentioned diplomatic efforts followed by severe sanctions, the Russian invasion of Ukraine continues to escalate. Logistics is always at the sharp end of these globally significant events. As logistics leaders come to terms with the consequences, risk mitigation is the only strategy that really counts. Gartner analysts covering logistics have detailed and evaluated several potential risks that could have detrimental effects on different aspects of the global logistics industry.

The Tip of the Disruption Iceberg

The rapid escalation of the Russian invasion of Ukraine has acutely exposed the lack of preparedness of some companies to deal with disruption. Be under no illusion, disruption has become, and will remain, a constant that every logistics leader must accept and adapt to. Figure 1 details some of the other potential — and increasingly likely — events that logistics leaders will face.

Logistics professionals can hope for the best, but they must absolutely prepare for the worst. Here are four things that logistics leaders must do now to ease the pain of disruption:

  • Prepare risk assessments across the logistics network and be ready to act on alternate scenarios if necessary — plan for the unexpected.
  • Increase transport planning lead times, reassess network resilience and agility — reduce surface area and eliminate exposure to risk.
  • Enable alternate sources of supply, mode of transportation along with alternative ports and routes. Diversify the carrier and 3PL supplier base to expand capacity.
  • Create contingency funding to cover the incremental costs of increased fees from fuel surcharges and alternate modes of transport.

 

Resources for Gartner Clients

Top Tips to Lead Logistics With Ambition During Disruptions

Ignition Guide to Conducting Scenario Planning for Your Logistics Function

Supply Chain Brief: Risks of Growing Russian-Ukrainian Tensions Put Global Supply Chains on High Alert

 

David Gonzalez
VP Analyst
David.Gonzalez@gartner.com            

Matthew Beckett
Senior Director Analyst
Matthew.Beckett@Gartner.com

Brian Whitlock
Sr Director Analyst
Brian.Whitlock@Gartner.com

 

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