Based on the responses of 1500 global decision makers across multiple industries, Interos’ Annual Global Supply Chain report looks at the evolving impact of disruption in the world.
Organisations using technology are experiencing significant benefits, with many planning to implement solutions in the next 12 months.
The report highlights similar themes to last year’s issue, where disruption continues to affect financial, operational, cyber, ESG and other risk categories.
Changes in the making
‘Enthusiasm for globalization’ has waned as companies are becoming more aware of their need to act on sustainability and reduce their supply chain footprint. 64% plan to make changes, whilst more companies want to diversify their supply bases, particularly in the wake of Russia’s war on Ukraine. 86% of respondents admitted their suppliers were too concentrated in one area of the world, with more than 6 in 10 organisations expecting to increase the number of companies in their supply chains (figure 2).
Supply chain disruptions are a regular occurrence, with 3 to 4 happening each year, costing companies an average of $182m in revenue.
Figure 3 shows how volatile supply chains are and how quickly global disruption can have an impact, including political instability. Companies need to be prepared, ideally spreading the risk and having appropriate risk mitigation and planning in place
Similar to last year’s report, visibility beyond tier 1 continues to be an issue, where supply chain disruption continues to have an impact. Even into the 3rd and 4th tier, 49% of organisations reported disruption occurs here; sometimes this can be down to a lack of information, the right technologies not being in place and data not being transparent.
How can companies mitigate supplier risk?
Mitigating supplier risk comes down to often they are monitored, where the majority (35%) monitor it monthly, whereas only 11% do so continuously, fortunately more than the 4% that only do it annually. Doing it more often opens up the opportunity to be ahead of risk and reduce long-term impact, protecting themselves from vulnerabilities in their supply chains
Why technology? What’s next?
1495 of the 1500 survey respondents admitted they saw clear benefits in investing in technology for supply chain risk management. They can gain access to data and the tools they need to manage risk.
‘Digital capabilities can pay off in both the long and short term’
Procurement Executive, IT & Technology, Germany
Similar to ProcureTech’s research in association with Globality, Interos’ findings are similar, where 99% of companies plan to shift their operating model through digitalisation (ProcureTech, 2022) Interos’ report identifies 49% of organisations are already implementing technologies, emphasising the existing benefits of investment to help them gain further insight into their supply chains to make informed decisions.
‘Through AI and big data, our whole supply chain will operate more efficiently and allow us to anticipate problems before they happen’
IT/Security Executive, Aerospace & Defence, Canada
The findings of this report show investment in technology is vital. Inevitably, it is the way forward for a lot of companies seeking to remain ahead and avoid major disruption in their supply chain.