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Study: Supply chain crisis to continue through 2023

Procurement leaders cite “significant” disruption in direct materials supply chain, say they lack confidence in their existing technology to handle problems, and consider modernizing the supply chain function a “strategic priority.”

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Supply chain delays and disruptions will stick around for the next year or so, according to procurement leaders surveyed this past spring about their sourcing and supply chain strategies. And the issue is pushing manufacturing firms, in particular, to accelerate their digitization initiatives.


Procurement software firm Ivalua surveyed 233 procurement executives from manufacturing companies across the United States and the United Kingdom in May and found that 97% are experiencing “significant disruption” in their direct materials supply chain, with 84% saying that modernizing supply chain processes is a strategic priority. And most said they are not confident that their existing technology can handle today’s supply chain challenges.

“2020’s global supply chain crisis has extended into 2022, compounded by the current geopolitical events,” Alex Saric, Ivalua’s chief marketing officer, said in a statement detailing the survey results. “As manufacturing organizations battle today’s crisis and work to avoid the next one, modernizing procurement technology has emerged as a top priority. The right technology can help provide the transparency needed to better assess risk and contingency options, and improve the effectiveness and efficiency of collaboration with suppliers.”

Examples of sourcing technologies include supplier management software and spend management programs. Modernizing those technologies is vital, as two-thirds of respondents said they are not confident that their existing technology can adequately handle current challenges or those expected in the next three years, according to the survey. The data also found that companies that are slow to modernize “face serious business risk, as 90% of procurement leaders indicate that supply chain problems are a greater threat than competitive market dynamics by nearly [two to one].”

Key survey findings include:
  • Forty-four percent of procurement leaders expect the supply chain crisis to ease by the end of 2023, while only 18% expect the supply chain crisis to ease by the end of 2022.
  • Procurement leaders with modernized sourcing technology are more than twice as likely to say the supply chain crisis will end sooner, in 2022, versus later, in 2023, according to the survey. Procurement leaders with modernized sourcing technology are 76% more likely to say they have an effective relationship with their suppliers, and they also consider procurement technology to be more important than growing headcount, by about four to one.
  • Respondents indicated that the most significant gaps in their procurement and supply chain infrastructure include: a lack of visibility into supplier risk; a “disjointed” source-to-pay process due to multiple systems; and a lack of spend reporting.
  • More than 80% of procurement leaders say dealing with supply chain disruptions has been the most significant challenge of their career. More than 90% said that avoiding supply chain disruption is in their top three priorities for this year.
  • Nearly 90% of procurement leaders said they need to view supply chain data by geography, but only 73% can easily access it.

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