Geopolitical threats are major blind spot for supply chains as government report highlights risks
Many UK businesses are failing to track geopolitical threats to their supply chains, with just 30% saying they monitor these risks, according to RSM UK’s Supply Chain Integrity survey. Despite the extensive range of risks supply chains currently face, over a third (36%) admitted their supply chain strategy needs updating.
The findings come as the government launches its Global Supply Chains report on risk and resilience, which emphasises the importance of robust and reliable supply chains for the UK’s future security and economic stability.
Despite the geopolitical blind spot, RSM’s research found 88% of businesses are confident their supply chain can withstand global shocks, with almost a quarter (24%) saying they are ‘very confident’ and a further 64% being ‘fairly confident’ they have effective monitoring in place. This is despite over half (53%) admitting they’d experienced more than one issue impacting their supply chain in the past year.
The top three risks monitored are operational risk (58%) followed by economic risk (56%) and cyber and technology risk (55%). Almost half of those surveyed said they’d describe their approach to supply chain management as ‘well-structured and proactive’ (42%).
RSM UK’s head of sustainability and ESG, Rich Hall, comments: “These are exceptionally difficult times for UK business leaders who are currently battling against acute disruption, in part due to the ongoing conflict in Iran, so the government’s increased focus on this issue is welcome and timely. Whether UK businesses can survive new global geopolitical shocks will largely depend on their supply chain resilience, and whether they are adequately monitoring the increasingly complex range of risks now faced over relevant timescales.”
RSM’s research also found discrepancies in confidence levels between C-suite supply chain leaders and operational supply chain managers, with nearly half (43%) of C-suite feeling ‘very confident’ in their supply chains, compared to less than one in five (19%) of operational staff.
Mark Crawford, supply chain risk and governance lead at RSM UKadded: “Our research suggests some businesses may be in danger of falling into a supply chain confidence trap. While confidence among C-suite supply chain leaders is high, the reality on the ground may reveal a less rosy picture. Understanding and tracking all potential threats -including geopolitical risks – with structured processes and robust governance is crucial for UK businesses to withstand global shocks faced now and in future.”