The Growing Cost of Blind Spots in Modern Supply Chains

Relentless disruptions, the near-constant threat of tariffs, and a geopolitical climate that seems to shift by the hour: businesses face challenges today they never would have dreamed of even a few short years ago, and it’s left many tackling these problems without even fully understanding the gaps in their own supply chains. 

“You would honestly be hard-pressed to find a company that doesn’t have some blind spots,” says Sam Gonzalez, director of enterprise solutions for supply chain visibility technology company DecisionPoint.

Gonzalez points to an “interesting dichotomy” seen in supply chains across the world, where cutting edge technology offers the most efficient way to manage shipments at every stage, but many companies still use the same tools and processes they’ve had in place for decades. And because those older tools aren’t equipped to deal with the onslaught of disruptions that have become the norm in recent years, businesses that haven’t caught up face real financial consequences. That leaves them “blind.”

And blind spots that make it difficult to navigate disruptions in a timely and efficient manner are expensive. According to research from the McKinsey Global Institute, the average company can expect to lose nearly half of one year’s profit over the course of a decade from a single prolonged, severe supply chain disruption. That can be driven by several factors, Gonzalez says, from inefficient routing of vehicles and shipments, to inaccurate data and inventory monitoring that fails to account for rapidly-changing scenarios. 

“Any time that you’re having to pivot quickly, it compounds any issues that you have — it becomes exponential,” he explains, given how previously tried-and-true crisis management strategies simply weren’t designed to keep up with the pace of today’s disruptions. “As soon as you ask somebody to do their job differently or quicker, suddenly those coping mechanisms don’t work anymore.”

That’s further compounded by a growing lack of visibility beyond direct suppliers. In a 2024 survey from McKinsey of 88 senior supply chain executives, just 30% said that their businesses have good visibility beyond their first tier of suppliers, down from 37% in the previous year’s survey, and 56% in 2022. And since major disruptions often start deep in the supply chain, as McKinsey points out, costly inefficiencies could be hiding in a blind spot for weeks or months before anyone even realizes there’s an issue.

A lack of visibility poses regulatory and humanitarian issues as well, particularly as modern supply chains have gotten more unwieldy and complex. A retailer today can have hundreds, if not thousands of suppliers to monitor, and it can be virtually impossible to ensure that each one is abiding by ethical labor standards, or any number of environmental regulations that can vary by country and region. To wit — of the 88 executives McKinsey surveyed, only 9% said that their supply chains are compliant with the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) that starts to come into force in 2026, which will require large companies to identify and address any potential human rights violations in their supply chains, and have a plan in place to align with the Paris Climate Agreement’s goal to achieve net zero greenhouse gas emissions by 2050. Another 30% of respondents said that they are either behind or “significantly” behind in their compliance efforts with the CSDDD.

Fully addressing those gaps can require a top-to-bottom technological overhaul, forcing a business to rethink nearly every system that touches its supply chain, including warehouse management systems, accounting software, predictive analytics, and inventory tracking. On the flip side of that, it can also be easy to fall into the trap of chasing whatever flashy new technology that happens to be in vogue in a given moment, making it crucial for any business to be strategic about what it actually needs.  

“It’s really easy to go to a show or read an article about AI, robotics, RFID, whatever it is, and get fixated on that being the solution to your problem,” Gonzalez says. “But when you start peeling back and actually talking about the problem you’re trying to add…