September 01, 2023 | Supply Chain Strategy
In today's volatile economic landscape, supply chain leaders are facing heightened pressures to mitigate risks and ensure resilience.
A recent survey of business executives by Economist Impact and GEP revealed a shift towards active supply chain risk management strategies, with a significant portion of leaders prioritizing resilience over mere speed and efficiency.
This paradigm shift reflects the evolving dynamics of supply chain management and underscores the critical need for its strategic adaptation.
The survey, encompassing 400 executives from the U.S. and Europe, highlights the strategies business leaders are employing to manage supply chain risks effectively. The study showcases a marked increase in the adoption of active supply chain risk management strategies — rising from 30% in 2022 to 38.5% this year.
Furthermore, an impressive 72% of businesses have integrated sustainability and ESG goals into their top three priorities, emphasizing the multi-dimensional nature of modern risk management.
As the supply chain landscape transforms, leaders are embracing a balanced approach that prioritizes resilience while maintaining operational efficiency.
Strikingly, nearly half of the surveyed leaders are directing their efforts towards building resilience, a clear departure from the traditional focus on speed and efficiency. This strategic shift reflects the understanding that a robust supply chain is not only a defensive measure but a key driver of sustained competitive advantage.
By harnessing the power of real-time visibility systems, stress-testing supply chains and adopting a diversified approach, organizations are crafting more robust management frameworks that empower them to proactively respond to disruptions and stay ahead of competitors.
A growing consensus as measured in the Economist Impact survey (57%) recognizes the critical importance of real-time visibility and control over supply chains. To achieve this, 39% of respondents said their companies are incorporating or planning to employ data and software solutions that provide up-to-date insights, recommendations and crucial information during disruptions. Real-time visibility tools foster operational efficiency by empowering users to make informed decisions in response to dynamic challenges.
Stress testing supply chains is emerging as a cornerstone of building resilience. By simulating disruption scenarios and identifying vulnerabilities, supply chain managers can then proactively implement solutions that fortify their operations against unforeseen challenges.
Diversification stands as a primary strategy for 2023, with an emphasis on broadening supplier networks and expanding geographies. This shift towards a multi-sourcing approach, in contrast to single-supplier reliance, underscores the commitment to resilience. Dual supply chains are being established, enabling businesses to navigate the intricacies of global markets while maintaining flexibility.
The events of the last few years have revealed a hard truth – that businesses pay a price for disruptions but also for resilience. Due to competitive pressures, businesses must build resilience without passing the cost on to their customers. Identifying cost-effective solutions is essential for making global supply chains more resilient.
To learn how you can help your supply chain organization strike the right balance between resilience, sustainability and costs, download the full report, available on our Knowledge Bank.