Predict and prevent supply chain disruption with the right technology

Following a period of rapid growth, investment in supply chain digitization is beginning to plateau. Despite growing awareness of the risks, research from McKinsey shows that many organizations are holding off on further investment in their supply chains, stalling digitization efforts at a time when resilience has perhaps never been more critical.

While that might not sound the alarm for some, most distributors grapple with some form of supply chain disruption, from cyberattacks and natural disasters to geopolitical events. Hitting pause on progress comes at a cost, and agility and future-readiness aren’t achieved by maintaining the status quo. Supply chain disruption is inevitable, and skilled workforces aren’t guaranteed, meaning distribution organizations simply cannot afford to stand still.

When disruption meets a dwindling workforce

Major supply chain disruptions often begin deep within the network, with many organizations taking up to two weeks to respond. For distributors already battling volatility, that’s a dangerous delay. Within that time, customer orders go unmet, delivery times slip, and operational costs start to climb.

Our research showed that, on average, only 17% of distribution organizations surveyed are well-prepared to mitigate disruptions. While global headlines tend to spotlight the most immediate threats, such as natural disasters, geopolitical unrest, and cyberattacks, there’s another persistent challenge undermining supply chain performance: labor shortages.

These aren’t small numbers. McKinsey estimates that gross domestic product (GDP) across 30 advanced economies could have been 1.5% higher in 2023 if employers had access to the workers they needed. Over the past decade, job vacancies per unemployed person have more than quadrupled.

For distribution organizations, the impact is clear. Fewer people are available to perform increasingly complex tasks, and those who are available expect modern tools, intuitive systems, and less repetitive manual work. Yet, many organizations still rely on dated processes and disconnected systems that leave them vulnerable when disruption hits.

Not investing more in supply chain digitization, relying on legacy systems, and lacking a skilled workforce is a high-risk strategy in a world of low predictability.

A smarter response starts with strategy

To move from reactive short-term fixes to proactive resilience, distributors need a clear strategy that’s built for uncertainty. That’s why we commissioned one of the largest global industry studies of its kind to uncover what truly sets the most productive distribution organizations apart. The result? We uncovered four key Vectors to Value that serve as a blueprint for success.

These strategic focus areas show how technology investments, when correctly applied, can unlock a measurable productivity advantage and put organizations firmly on the path to value creation:

1. Agility and future-readiness: The ability to anticipate disruption and adapt quickly
2. Processes and systems: Where automation, visibility, and efficiency go hand in hand
3. Culture of data: Real-time insights that power faster, smarter decision-making
4. Customer focus: Putting customer outcomes at the heart of every operational decision

81% of distribution organizations agree that success in their industry will depend on the use of new technologies. With this in mind, the most productive distribution organizations don’t just digitize; they optimize. They invest in centralized platforms that offer real-time end-to-end visibility across the supply chain, enabling them to detect issues early so they can act fast. They also leverage automated workflows and intuitive systems to optimize their teams, which in turn also helps attract digital-native talent who expect more from their tools.

Aside from integrating technology that attracts skilled workers, automating manual processes can also help reduce the need for larger workforces. Predictive technologies like artificial intelligence (AI) empower smarter decisions and streamline operations. Distributors can set up automated responses based on specific triggers like rerouting shipments, adjusting inventory, or alerting customers about issues that may impact fulfillment. While this offers greater efficiency, it also enables distributors to stay competitive in a market where unreliable service sends customers elsewhere.

Delays are inconvenient at best and, at worst, they’re costly.

Predicting potential disruption not only means distributors can respond more quickly, but it also means customers still receive the goods they expect, when they expect them. That level of reliability translates to retention. As expectations rise and competitors crowd the market, seamless and trustworthy fulfillment is not only becoming a key differentiator but a necessity. Organizations that consistently deliver are the ones that stay top of mind and top of the value chain.

Discover how possible happens

Labor shortages and inevitable disruption mean distributors can’t afford to delay. The most productive distribution organizations are acting now, using technology to drive business productivity, gain visibility to real-time insights for smarter decision-making, and ultimately secure long-term success. Our industry AI is purpose-built for distribution, enabling customers to gain not only predictive insights but also to personalize experiences and accelerate operations.

To realize the full impact of digital transformation, a shift in mindset is essential. The “value void”—the gap between technology’s promise and the productivity it actually delivers—remains a major hurdle. While every organization is chasing value, few have the strategic focus, the right metrics, or the right technology in place to truly unleash it.

To make measurable progress, distributors need a partner who understands the complexity of their world and can help close the gap between ambition and outcome.

Download our report to explore the Vectors to Value in more detail and see how the most productive distributors are turning digital investment into real-world advantage.