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.
Proxima’s Global Supply Chain Resilience Outlook is based on a survey of over 500 CEOs at businesses generating over $500m in annual revenue across the UK, USA, Australia, Singapore and Germany. It found that 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 ten CEOs (38%) stated they would pursue cost savings 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.
Backing this risk averse approach up was the statistic that nearly half (45%) of businesses have experienced a supply chain disruption caused by a cyber incident in the last 24 months.
Further key findings
- 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 three 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 is delivering 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.
Simon Geale, Executive Vice President at Proxima, said, “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.
“CEOs are further recognising 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.”
The report also finds that 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.
