GEP Report: Up to $4T in Revenue Evaporated in Supply Chain Disruptions

The survey found that the biggest supply chain challenges global organizations face moving forward are compliance with constantly changing trade regulations, cyberattack, supplier risk and managing brand reputation.

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Sixty-four percent of companies with revenue greater than $1 billion reported revenue losses between 6-20% in 2020, which calculates to between $2-4 trillion in lost revenue, according to a recent GEP report.

The survey of C-suite executives at European and U.S. global companies, conducted by The Economist Intelligence Unit (EIU), found that the biggest supply chain challenges global organizations face moving forward are compliance with constantly changing trade regulations, cyberattack, supplier risk and managing brand reputation.

“While COVID-19 understandably gets all the press, it is far from the only force wreaking havoc with the world's global supply chains that costs most companies double-digit revenue loss and, perhaps more important, immeasurable reputational damage and customer loyalty," says John Piatek, GEP’s VP, consulting, and chairman of the firm's Thought Leadership Council. "Supply chains and procurement are a key driver of sustainable competitive advantage, but despite spending millions on ERP solutions, most global companies are ill-equipped to effectively manage complex global supply chains in face of uncertainty, global warming, tariffs and trade wars, and national governments increasing control of natural resources and strategic industries."

From GEP:

  • 38% of companies with revenue greater than $1 billion report "significant damage to company's brand reputation" and one-third (33%) said their "operational costs increased" significantly as a direct result of supply chain disruptions.
  • Ensuring availability of lines of credit from investors and funders (40%) continues to be a top challenge.
  • Geopolitical risks such as regional trade policy, instability and corruption represent an organization's biggest concern (31.5%) than any other factor, including increasing labor costs in supplier countries.

 


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