Disruption to the global supply chain is now costing large organisations on average $184 million a year.
The Interos Annual Global Supply Chain Report, published today, by Washington DC based operational resilience firm Interos found almost veery major firm surveyed had been impacted.
Nearly all (94%) of the 900 senior IT, IT security and procurement decision-makers from companies across the US and EU reported some negative impact to revenue resulting from supply chain disruption, which they attributed to a variety of supply chain risks including cyber breaches, financial risks, and ESG (environment, social, governance) transparency issues.
The study came as the world continued to suffer from a series of major supply chain shocks to the global economy, including COVID, SolarWinds, and the blockage of the Suez Canal.
The study also showed that supply chain shocks aren’t just impacting revenue; they’re damaging public perception, with 83% reporting that their respective firms have suffered reputational damage as a result of supply chain disruption.
“Our survey results underscore the growing importance of supply chain operational resilience in the globally interconnected world that we all live and operate in,” said Jennifer Bisceglie, CEO of Interos. “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 recognizing as critically important to protecting both the bottom line and corporate reputation.”
“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.
In addition to suffering monetary and reputational damages, global supply chain leaders continue to contend with disruption from COVID and have a high level of concern over the future impact of brewing international trade conflict according to the survey.
A little over half (51%) of organisations’ global supply chains have been impacted by the COVID-19 pandemic in the last two years with almost all (89%) of those affected reporting disruptions to product lines and locations.
“In the wake of recent ransomware attacks including the Colonial Pipeline and JBS hacks, it should come as no surprise that three-quarters (77%) of those surveyed encountered at least one cyber-attack on their supply chain in the last year,” said the survey. “An overwhelming majority (88%) also reported that international trade disputes would cause significant, notable, or moderate impacts to their organisation with the most commonly faced impacts being forced changes in production locations, disruption to banking/payment infrastructure, and increases in cyber espionage against their business, among others.”
Interos said visibility was now more important than ever.
“The status quo, manual, survey-driven processes that provide periodic visibility over a portion of the supply chain, is rapidly shifting,” it added. “As supply-chain driven cyberattacks and a host of other factors increase volatility, corporate leaders are recognising that the supply chain security and resilience must be a core business priority.
“In fact, half of those surveyed (50%) believe that it will be their organization’s top business priority in two years’ time, compared to just under two-fifths currently (39%). This shift is reflected in the increasing frequency that boards are meeting to discuss supply chain risk, with over three-quarters (78%) reporting that their boards confer on this topic at least once every month.”
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