Companies lose $199m annually due to 3, or more, disruptive events per year
- Lizzie Black
- August 30, 2022
Supply chain disruption continues to impact companies and major decision makers.
69% plan to make wholesale changes to their supply chain footprint whilst 76% plan to implement or introduce technology to gain visibility within the next 12 months.
In Interos‘ 2nd edition of its Annual Global Supply Chain Resilience 2022 Report, it looks at the impact of global events and how companies plan to combat the effects. Interos’ previous report focused on 1,500 global decision makers and the impact of global disruption, meanwhile this report is based on 300 global IT, IT security and procurement decision makers across tech industry, impacted by continued supply chain disruption, with revenue ranging from $1 billion to $50+ billion. They reveal similar findings, despite excluding the impact of the war in Ukraine from this report.
Many organisations reported facing 3 major supply chain events within the last 12 months, where disruption cost an average of $199m in annual revenue loss.
69% plan to make wholesale changes to their supply chain footprint whilst 76% plan to implement or introduce technology to gain visibility within the next 12 months.
Reconfiguring global supply chains
83% of tech executives admitted their suppliers are too concentrated in one area of the world: concentration risks, shortages and growing lead times in sourcing and manufacturing call for action.
To mitigate risk, companies plan to ‘reshore’ suppliers, with 49% intending to move to home countries, or areas closer to their HQ.
41% of organisations have been impacted by 3-4 supply chain events, along with a further 15% experiencing 5-6 in the last 12 months. Increased supply chains risk results in increased monitoring across finance, operations, restrictions/sanctions, geopolitical, cyber and ESG.
The ripple effect of disruption continues throughout different tiers. 52% experienced disruption beyond tiers 1 and 2, despite planning to increase the number of companies in their supply chains, further adding to risk (figure 1).
Supply chain further improvements
Only 19% of tech organisations reported monitoring supplier risk on a continuous basis, which is most likely aided by technology. Digital solutions can analyse and mitigate risk through enhanced access to data and information (figure 2).
All respondents fortunately either have supply chain visibility technology, or plan to introduce appropriate technology in the next 12 months: 26% already have it in place and implemented, whilst 49% are still in the process of implementing it.
87% revealed they would value a partnership to provide more supply chain risk visibility throughout their organisation.
Forward thinking from leaders encouraging better internal collaboration and information sharing is needed to manage risk effectively. They will also require better external collaboration with suppliers and proactive risk planning, where they should invest in the right solutions and encourage collaboration where possible to continue educating stakeholders and remain resilient.
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