Supply chain disruptions continue to cost companies big, especially in the wake of a turbulent 2020, according to an international survey of senior decision makers at large companies, released this week.
The Annual Global Supply Chain Report from supply chain risk management firm Interos polled 900 senior IT, IT security, and procurement leaders in the United States and Europe and found that supply chain disruptions cost large companies about $184 million a year on average. Trade disputes, cyber attacks, and the effects of the Covid-19 pandemic are among the biggest risks, according to survey respondents, all of whom work for companies with more than $1 billion in annual sales.
“Our survey results underscore the growing importance of supply chain operational resilience in the globally interconnected world that we all live and operate in,” Jennifer Bisceglie, Interos CEO, said in a statement announcing the findings. “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.”
Among the findings, supply chain leaders said they continue to deal with disruption from the pandemic. Fifty-one percent of respondents said their supply chains have been affected by Covid-19-related issues, with 89% of those reporting disruptions to product lines and locations. Cyber attacks also ranked high, with more than three-quarters of respondents saying they encountered at least one such attack on their suppy chain in the last year. Trade issues are a concern as well, with 88% of respondents indicating that international trade disputes would cause “significant, notable, or moderate impacts” on their organization. The most common impacts include forced changes in production locations, disruption to banking/payment infrastructure, and increases in cyber espionage agains their business, among others.
In response to the volatile risk climate, respondents said they will develop a sharper focus on supply chain security and resilience. Half of respondents said security and resilience will be a top business priority in the next two years, up from 39% who said they are focused on those issues today; more than three-quarters (78%) of respondents said their company leaders meet to discuss the topic at least once a month.