Supply chain disruptions cost companies an average of $182 million in lost revenue annually
Interos, the hypergrowth operational resilience company, today released Resilience 2022, the second edition of the company’s Annual Global Supply Chain Report. The survey of more than 1,500 global supply chain leaders highlights the impact of continued supply chain upheavals across multiple industries. Organizations indicated that on average they were impacted by three significant supply chain events within the last 12 months (not including the war in Ukraine). The study also found that supply chain disruptions cost organizations $182 million annually in lost revenue.
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Global supply networks remain in flux amid resurgent pandemic lockdowns, geopolitical conflicts, and escalating trade friction with China. The ripple effect of these and other supply shocks are being felt in multiple industries, prompting the World Bank to downgrade 2022 global GDP growth forecasts to 3.2% – compared to 2021’s GDP growth of 5.7%.
Key findings of the Interos Resilience 2022 survey include:
- Only 11% of organizations currently monitor supplier risk on a continuous basis
- 86% of companies acknowledge that their supply chain is too concentrated given the many risks and more than 50% said they planned to nearshore to bring their supplies closer to their operations
- 64% of companies plan to make wholesale changes to their supply chain footprint
- 77% plan to implement or introduce technology in next 12 months to gain visibility into their supply chains
The Interos research was conducted prior to Russia’s invasion of Ukraine, which has further exacerbated macroeconomic volatility and supply chain pressures.
“The ‘just-in-time’ supply model has been pushed far past its breaking point,” said Jennifer Bisceglie, CEO and Founder of Interos. “We have to plan accordingly in a volatile world where once-in-a-lifetime events are now the norm because we have seen the impacts, not only in the terrible human toll in the case of Ukraine, but also directly to the bottom line of companies and their global reputation among customers, partners, and investors.”
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Study Highlights Need for Sustainable Supply Chains
Environmental, social, and governance (ESG) factors are a swiftly rising priority for supply chain leaders. Just this March, the U.S. Securities and Exchange Commission (SEC) proposed a new rule requiring companies to disclose direct, indirect greenhouse gas emissions and, crucially, those generated by their suppliers, while UK regulators are already implementing strict requirements.
“We found that large companies are losing, on average, $35M annually in revenue because of ESG related supplier risk,” Bisceglie explains. “Between those figures, investor pressure, and the explicit legal requirements in development in various countries, it is clear that organizations are increasingly being called to account for their global supply chain footprint. A lack of visibility into those supply chains is no longer an acceptable excuse.”
Visibility is Key to Operational Resilience
You cannot monitor what you cannot see. Supply chain visibility is a key enabler of operational resilience and it’s an area that organizations need to improve to protect themselves. A majority (64%) of organizations said they plan to make wholesale changes to their supply chain footprint.
However, only 19%Â currently have supply chain technology solutions implemented. But the urgency to adopt these is clear as over 75% Â of survey respondents said they plan to implement them over the next 12 months.
