Half of global (51%) CEOs say their businesses could not maintain their day-to-day operations for over three weeks without experiencing some form of disruption if a major supply chain shock occurred tomorrow, according to those surveyed for new research from Proxima.
“It is no secret that businesses are navigating a period of intense supply chain uncertainty. This research shows that CEOs are still very alert to disruption risk and that they are placing an increasing emphasis on building sustainable supply chain resilience to counteract,” says Simon Geale, EVP at Proxima. “CEOs are further recognizing the substantial costs and vulnerabilities their companies could face from supply chain disruption, and it is now clear many are willing to pay a premium to guard against that risk. Resilience has become a boardroom topic and a price worth paying.”
Key takeaways:
· In order to guarantee supply chain resilience, almost three-quarters (72%) of CEOs would accept an uplift of more than 10% on their current third-party supplier costs.
· When asked how they might fund such an uplift in their third-party supplier costs almost four in 10 CEOs (38%) stated they would pursue cost saving measures while 35% said they would pass price rises on to customers. A smaller number (26%) said they need to absorb the costs through reduced margins.
· The vast majority of CEOs surveyed (78%) also alluded to the internal tensions that can arise in large global companies when it comes to adopting and implementing fast-moving technologies such as AI, while also staying adherent to business compliance practices.
· Nearly half (45%) of businesses have experienced a supply chain disruption caused by a cyber incident in the last 24 months.
- 17.3% is the mean uplift in costs that CEOs will accept to ensure supply chain resilience.
- The majority (56%) of CEOs say that if their Top 3 suppliers were disrupted for two weeks, 11-20% of their revenue would be at risk. Almost a quarter (24%) put the risk at 21-40% of revenue.
- Over half of CEOs surveyed (51%) say AI delivers measurable value in supplier risk monitoring, yet they also say there are barriers in further scaling AI use in the supply chain including data quality (38%), lack of skills (30%) and clarity around ROI (29%).
- Nearly half (45%) of businesses have experienced a supply chain disruption caused by a cyber incident in the past 24 months, but only 35% have real-time visibility into the cyber risk of their critical suppliers.
- CEOs are facing a multitude of threats with roughly an equal number (17%-22%) saying conflict and geopolitical tensions, emerging technologies, sustainability targets and regulatory requirements, climate change and extreme weather events, and protectionist policies such as tariffs pose the greatest financial challenge to their supply chains.
