In the past 12 months, 70% of organizations have had between 1-5 critical suppliers fail, while 41% say they’re one supplier failure away from a supply chain crisis, according to Building Resilience from the Ground Up: Anchoring Supplier Risk in a Unified System of Record, released by Ivalua.
The survey found that organizations take 25 days on average to identify and onboard a replacement supplier, during which 74% are exposed to shortages or significant operational disruption. More concerning still, 57% of organizations admit they are reacting to these events rather than preventing them.
“Supplier failure is no longer an exception; it is a cost of doing business. The organizations suffering the most aren’t necessarily those with weaker suppliers, but those blind to risks until it’s too late,” says Jarrod McAdoo, director at Ivalua. “With inflation, tariffs and rising costs already stretching operations, a single supplier failure can be the tipping point that pushes an already strained supply chain into collapse.”
Key takeaways:
· Over half of organizations (53%) have little to no visibility into the cybersecurity posture of their suppliers, with 51% globally and 44% in the United States admitting that a major supplier cyber incident would catch them entirely by surprise.
· Other areas of limited visibility include ESG performance and risk (53%), financial health (44%), operational capacity and delivery performance (41%) and compliance status, including certifications and regulatory requirements (40%).
· 45% of organizations have no single, trusted view of supplier risk across the business. And, 76% still rely on manual processes for due diligence and risk checks on critical suppliers, with 58% agreeing that their reliance on spreadsheets leaves them exposed to human error. As a result, over half (53%) report low or no visibility into their sub-tier suppliers, a gap that widens to 65% among U.S. organizations. Almost three-quarters (73%) say they would like to spot supplier distress earlier to prevent disruption; that desire rises to 83% in the United States.
· AI plays an important role in helping to predict and holistically plan for supplier failure, but only 39% of organizations are currently using AI in supplier due diligence or risk monitoring (though the United States leads slightly at 44%). Further, AI’s potential is limited by the quality of underlying data, with 50% agreeing that their supplier data is not AI-ready, limiting their ability to scale analytics and surface risk early.
