Learn what actions supply chain leaders should take to design a balanced network and ensure that it remains effective under changing conditions.
Key Takeaways
- “Overweighting costs inhibits agility and flexibility, making organizations unable to respond to disruptions and shifts in today’s volatile and uncertain world.”
- “Overfitting to resilience often means adding redundant capacity , driving up costs and hampering competitiveness.”
What to Know From The Gartner® Report #
“A supply chain network that is fit for purpose in the long term is the one that balances objectives beyond cost. Supply chain leaders responsible for strategy can use the framework presented in this research to design a balanced network and ensure that it remains effective under changing conditions.”
Recommendations
- “Build out a long-term supply chain network strategy and principles by defining and balancing corporate objectives using analytics and a robust stakeholder engagement process."
- “Develop a phased network transition plan by evaluating and addressing internal and external constraints.”
- “Reprioritize planned changes by conducting periodic reviews of the future network state’s definition based on updated inputs and assumptions.”
“Fitting a network into a singular objective leaves networks exposed in today’s volatile supply chain landscape. Rather than resilience and agility replacing cost as drivers of network change, they are joining cost as key drivers of change. Figure 1 showcases the often-contradictory priorities that serve as drivers of supply chain network change today.”
Design a future-ready supply chain network that balances cost and resilience.
Addressing Agility and Flexibility with Fractional Warehousing #
Flexible warehousing directly addresses the need for improving agility and flexibility in the supply chain network by providing scalable, flexible storage and services that allow businesses to quickly adapt to changing market conditions without the constraints of traditional, fixed-cost leases.
Here's how flexible warehousing addresses this top priority.
Enhanced Scalability and Adaptability #
Flexible warehousing operates on a pay-for-what-you-use or short-term commitment model, which fundamentally increases a company's agility by:
- Handling Fluctuating Demand: Businesses can rapidly scale their storage space up or down to meet seasonal peaks, sudden surges in demand, or unexpected downturns. This avoids paying for unused, fixed space during slow periods and prevents stockouts or fulfillment delays during busy times.
- Strategically Place Goods Closer to Demand Centers: Companies can quickly establish new distribution points closer to customers or suppliers without long lead times or high capital expenditure (CapEx) commitments. Improving efficiency of specialized, heavy, and bulky products that are hard to move and store that causes operational friction in automated facilities improving service levels and reducing transportation costs and risk.
Increased Operational Flexibility #
Flexible warehousing improves operational agility by separating storage capacity from fixed infrastructure and long-term financial commitments:
- Cost Agility: By shifting from fixed costs (long-term leases, building maintenance) to variable, transactional costs, companies can better manage their expenses in alignment with actual business volume. This provides financial flexibility to react to economic volatility.
- Reduced Risk and Commitment: Short-term contracts and shared warehousing models reduce the financial risk associated with long-term real estate obligations. This allows supply chain leaders to make decisions and transition the network more quickly.
- Access to Technology and Services: With a single integration, access 3,000+ warehouses in North America. This allows businesses to rapidly deploy new warehouses to meet emerging needs or capitalize on time-sensitive opportunities without significant internal IT investment.
Flexible warehousing acts as a dynamic buffer capacity and a rapid deployment tool, enabling the supply chain to respond to disruptions and shifts more reliably and without sacrificing cost efficiency, perfectly balancing the contradictory priorities of cost, resilience, and agility.
View Flexible Warehouse Space in the Flexe Network Instantly.
You might also be interested in: #
- Article: What is Fractional Warehousing
- Insights: How Spot Warehousing with Flexe Mirrors the Agility of the Spot Freight Market
- Webinar: The Smart Savings of Fractional Warehousing
Disclaimer
Gartner, Volatility Requires a New Approach to Supply Chain Network Design Published 13 April 2025, By Vicky Forman Et Al.
This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Flexe.
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
