Kearney’s internal think tank, the Supply Chain Institute, released its latest semiannual supply chain navigator report, a fourth-quarter 2026 briefing with 2027 outlooks. The report forecasts changing supply chain costs across industries, analyzing the operational, macroeconomic and geopolitical forces that affect company performance. Since its inception 10 quarters ago, it has had an accuracy rate of more than 95%. The latest edition focuses on the factors behind rising trade and supply chain costs, including geopolitical risk, expanding manufacturing, climbing freight costs and rising tech hardware prices.
“We’re looking at the same supply chain costs through two lenses: fundamentals and risk,” said report co-author Rupal Deshmukh, a partner in Kearney’s Supply Chain Institute. “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.”
The report analyzes the factors driving up supply chain costs, viewing them through the two lenses of fundamentals and sentiment. Fundamentals 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. 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% to 6.7% range, mapped by business unit, product, supplier and customer
“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 and study co-author 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.”
Gandhi added, “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.”
