Supply Chain Problem Costing Manufacturers 10% of Revenue

Seventy-five percent of companies say supply plan failures are most likely to occur at the factory-specific execution stage—not in the forecast itself, according to a new study conducted by Wakefield Research and released by LeanDNA, supply chain solutions provider.

And nearly half (47%) report that 10% or more of their company's annual revenue is lost or put at risk as a direct result.

The survey concludes that the forecast isn't the failure point. It's what happens after the plan leaves the planning system — the work of ensuring materials, suppliers, and production priorities are aligned and ready at the factory level. 

The Failure Happens After the Plan Is Set

Despite making forecasting improvement a top organizational priority in recent years — cited by three in four manufacturers (74%) — the research makes clear this investment has not prevented the disruptions that define day-to-day factory operations. 80% of decision makers acknowledge that forecasting alone cannot account for real-world execution failures. The problem is structural, and it sits downstream.

The data bears this out. More than four in five manufacturers (83%) report supplier changes causing multiple production disruptions each quarter, with more than half (56%) experiencing them at least monthly.

Nearly three in four (72%) discovered a material shortage only after production delays were already unavoidable — meaning the risk was present well before it became visible and the window to act had already closed.

When disruptions are finally detected, the response compounds the damage. More than half of manufacturers (51%) take a week or longer to determine corrective action — a costly lag in environments where production schedules are measured in hours.

The Planning Tools Manufacturers Rely On Were Never Built for This

The gap isn't just in how manufacturers are executing — it's in the tools they've been given to do it. Nearly three in four manufacturers (73%) say their ERP can provide visibility into required materials but cannot prevent execution failures. Nearly all (93%) report difficulty getting ERP visibility into actual manufacturing execution outcomes.

The industry's planning infrastructure was designed to define intent, not manage execution. ERP systems and demand planning tools establish what materials should be ordered and when — but they are not built to manage how those decisions hold up against supplier conditions, material constraints, and shifting production realities at the factory floor. The result is a structural blind spot that no amount of better forecasting will resolve.

Without tools capable of managing supply readiness in real time, manufacturers are absorbing the cost in cash. Nearly two-thirds (64%) report spending 10% or more of their total manufacturing budget reacting to disruptions through premium freight, emergency sourcing, and last-minute production changes.

The Readiness Gap Has a Measurable Price: Revenue, Inventory, and Careers

The financial consequences compound quickly. Over the past 12 months, 84% of manufacturers experienced inventory shortages at least twice and 85% saw on-time delivery disrupted multiple times.

Excess inventory — driven by the same misalignment — affected more than 80%. The most immediate costs cited are expediting (37%), production delays (31%), and direct revenue loss (28%).

The organizational damage runs deeper. Nearly three in four decision makers (74%) say being permanently stuck in reactive mode erodes trust between planning and operations teams, across supplier relationships, and in the credibility of the supply plan itself. A plan that teams do not trust is a plan they will not follow — which produces exactly the siloed, exception-driven operations that define the manufacturing environments most at risk.

For the individuals accountable for these outcomes, the stakes are personal. 77% face direct pressure to improve capital flow, and 82% are concerned that continued factory execution failures could cost them their job. The readiness gap is not an abstract operational challenge. It is a career risk for the people who own it.

AI Is Already Pointing the Way Forward

The research also surfaces a clear signal about where manufacturers see the solution. Nearly all decision makers (92%) report that their leadership has at least some confidence in AI to address the misalignment between demand planning and factory-level execution, with 40% expressing a lot, or complete confidence. 80% say AI is essential, not optional, for eliminating execution drag.

The shift manufacturers are describing is specific: from supply planning as a scheduled process that produces a plan to supply planning as a continuous, AI-powered system that ensures the organization remains ready to execute — across every site, every supplier, and every buyer workflow — and is updated in real time as conditions change. That is a fundamentally different standard for the discipline, and the industry is signaling it is ready for it.