Cost escalation top supply chain concern of most firms

Even though 73% of COOs report having a supply chain strategy, only half plan ahead.

Five in 10 firms named cost escalation as their top supply chain concern, as supply chain costs are projected to rise to 7% above inflation by the fourth quarter of the year, according to a Kearney report.

According to the report, even though 73% of COOs report having a supply chain strategy, only half review it quarterly or plan more than a year ahead.

“Firms must build systems that plan, pivot, and perform under pressure as volatility is no longer an occasional disruption; it is the operating environment,” Kearney said.

For instance, Cisco have turned scenario planning into a core capability, not a crisis response.

“Using real-time data and digital twins, they simulate geopolitical events, demand shifts, and supply shocks, then trigger prebuilt playbooks with clear financial guardrails,” the report added.

Additionally, companies must design for artificial intelligence-led business reengineering, not just AI-enabled tasks.

Ford's CEO predicts that AI could replace up to half of all white-collar jobs; hence, leaders need to decide how to integrate this into their business operations now.

Further, Walmart is putting AI directly in the hands of 1.5 million store associates, enabling frontline decisions that once required layers of escalation.

Finally, companies building an advantage are those forming high-trust, high-speed networks that share data, capacity, and innovation.

“For example, by implementing Blue Yonder's AI and machine-learning solution, building materials manufacturer Knauf aims to increase its on-time, in-full customer delivery rate to 95%,” Kearney noted.