SourceDay’s Supply Chain Volatility Index is comprised of three factors: on-time delivery, PO changes, and price risk. Supply Chain volatility remains significantly elevated in Q3, and the largest driver of volatility today is uncertainty: POs change more frequently than any time since Q2 of 2022, during supply chain shocks of the pandemic.
While the pandemic was characterized by scarcity (OTD plummeted and lead times rose), today’s uncertainty looks very different: OTD is stable and actually improved by 2% in the last 12 months..
Uncertainty isn’t just showing up in procurement behavior, it’s also top of mind for procurement decision makers. In a September survey, SourceDay asked supply chain leaders ‘What do you see as your main business challenges?’ The top two responses were ‘global economic uncertainty’ and ‘demand unpredictability’. These both edged out ‘cost pressures’, a marked shift from Q2 when tariffs and price shocks were the center of gravity.
Price variance and parts inflation remain higher than usual in Q3, but have leveled off since Q2 and the announcement of a new U.S. tariff regime. For a more detailed look into procurement data, look to our most recent edition of SourceDay’s Supply Volatility Index.