In light of a series of unprecedented global supply chains disruptions - COVID-19, SolarWinds, and Suez Canal - now more than ever supply chain visibility is important to big businesses.
Commissioned by Interos - an operational resilience company that uses its AI-powered platform maps to monitor and model global supply chains - the company conducted an international survey of 900 senior IT, IT security, and procurement decisions makers from companies in the US and Europe.
“Our survey results underscore the growing importance of supply chain operational resilience in the globally interconnected world that we all live and operate in. We can no longer cleanly separate digital and physical supply chains, which is driving a need for greater transparency into hidden supply chain risks, relationships and reliances, which companies are recognising as critically important to protect both the bottom line and corporate reputation,” said Jennifer Bisceglie, CEO of Interos.
Conducted by market-research firm, Vanson Bourne, on behalf of Interos, the study revealed that global supply chain disruptions cost large companies - on average - US$184mn a year, with 94% reporting some negative impact to revenue resulting from supply chain disruptions. Such disruptions included: cyber breaches, financial risks, and environment, social, and governance (ESG) transparency issues.
Such supply chain disruptions, however, are not only impacting revenue, 83% of those surveyed reported that their company has suffered reputational damage as a result of supply chain disruptions.
“The recent White House Executive Orders on supply chain integrity and cybersecurity point to the fact that the fragile extended supply chain has become the soft underbelly of the global economy — and we see the private sector both here in the States and in Europe starting to think more intensely about how best to respond to such growing challenges and vulnerabilities,” Bisceglie added.
Continued disruption from COVID, Trade Disputes and Cyber Attacks
In addition to monetary and reputational damages, supply chain leaders continue to face disruptions as a result of COVID and have high concerns over the future impact of the international trade conflict.
51% of organisations’ global supply chains have been impacted by the pandemic in the last two years, with 89% of those affected reporting disruption to their product lines and locations.
Alongside the disruptions caused by the pandemic, 77% of those surveyed encountered at least one cyberattack on their supply chain in the past year. While 88% reported that international trade disputes would cause significant, notable, or moderate impacts to their organisation, including forced changes to production locations, disrupted banking/payment infrastructure, and increased cyber espionage.
Visibility is Needed Now More than Ever
As supply chain volatility increases, corporate leaders are recognising the importance of placing supply chain security and resilience at the core of business priorities. 50% of those surveyed believe that it will be their organisations top business priority in two years time, with 39% making it a priority now. The shift reflects the increased discussion in board meetings centred around supply chain risk, with 78% reporting that their board discusses this topic at least once a month.
While many are making supply chain risk and operational resilience a key business priority, Interos identifies that full implementation of new, rapid risk mitigation technologies - such as AI, data and analytics - lags behind. Currently, only 34% of organisations assess their global supply chain continuously, despite 45% of leaders ranking these technologies as the top three most beneficial tools for monitoring their global supply chains.