High costs and the risk of future costs have led Kearney, a global consulting firm, to predict a range of price increases in the supply chain.

“The Supply Chain Navigator projects global costs to rise 2.7%in the first half of 2027, with an upside possibility of 6.7%,” noted Kearney partner, global lead for the Kearney Supply Chain Institute Suketu Gandhi.

“That range masks significant divergences by country, with India possibly rising as much as 8.3%, China 5.9%, the United States 5%, Mexico 4.5%, and Germany 3.1%. Planning against the full range, not a single number, is what matters this quarter.”

Added Suketu Gandhi: “Geopolitical risk is the standout signal, by far the largest movement in either the fundamentals or sentiment data. It’s also a pressure point we’ve already flagged as one of executives’ top three roadblocks to growth.”

The Supply Chain Navigator, which is produced by Kearney's internal think tank, the Supply Chain Institute, was created 10 quarters ago and has an accuracy rate of more than 95%. 

The Navigator analyzes the factors driving up supply chain costs and views them through the two lenses of fundamentals and sentiment. Fundamentals factors include sector input costs, labor costs, inventory, import prices, export prices, sector gross output, and consumer spending. Sentiment and risk factors include business activity, market-demand risk, market-cost risk, trade-credit risk, credit risk, Logistics Managers’ Index (LMI) inventory levels, LMI inventory costs, and geopolitical risk.

“We’re looking at the same supply chain costs through two lenses: fundamentals and risk,” offers Rupal Deshmukh, a partner in Kearney’s Supply Chain Institute, in a statement.

“Fundamentals show what businesses are paying today. Risk shows the pressure building before it hits the reported numbers. Keeping the two separate tells us what has happened to costs and what could happen next.”

With global supply chains operating under an elevated cost structure due to all of these factors, the report lays out three disciplines companies should now prioritize when shaping their operations performance:

• Protecting operating continuity and how to make it accountable
• Releasing working capital by reducing excess stock, reviewing collections, and resolving payment disputes
• Planning for volatility in the 2.7% - 6.7% range, mapped by business unit, product, supplier, and customer