Global disruption: 86% of CEOs see resiliency problem in their supply chain

The 2024 Supply Chain Barometer, an annual report from procurement and supply chain consultancy Proxima, shows that 86% of CEOs see resiliency issues in their supply chain. Whilst CEOs are looking at shifting critical supply chains and leveraging AI, significant challenges persist.

The Barometer, based on a survey of 3,000 CEOs in the UK, Europe and U.S., provides a critical temperature check on how business leaders are responding to geopolitical, economic and environmental supply chain issues. This year’s results reveal that complex supply chains continue to be redesigned and reconfigured as globalization continues to give way to regional, “friendly” trading zones.

Further key findings from the research include:

• CEOs double down on supply chains – Despite easing inflation and stable markets, 96% of CEOs are dedicating equal or more time to supply chain issues this year. Geopolitical tensions are pushing leaders to navigate uncharted global dynamics with no end in sight.
• New regional trading zones forming – Large organizations are focusing more on offshoring and notably less on onshoring (25% below overall). CEOs in DACH and Benelux more likely to be looking at onshoring critical supply chains than their counterparts in the UK and US.
• AI Adoption: High Interest, Slow Impact – AI remains hot, with over 99% of CEOs eyeing it for supply chains and 82% planning new AI initiatives this year. Yet only 22% expect significant impact within the same timeframe, indicating that there is significant “hype” around the technology but limited adoption in real terms.
• Human rights issues remain a concern – In a continuation from last year, over two thirds of CEOs (70%) say they are concerned about the potential for human or labor rights issues in their supply chain. Concern is highest among the utilities (78.2%), manufacturing (77.1%) and retail (75.4%) sectors.
• CEOs facing complex barriers on decarbonization – There is consensus among global CEOs (99%) that there are barriers to decarbonizing supply chains, but there is not consensus on which is biggest. While the largest barrier is the complexity of the work (29%), the other response options carry nearly the same weight (cost, skills and access to data). The leading barrier in larger organizations is the lack of access to required data, at 30% in contrast to the 22% average for all organizations.

Simon Geale, executive vice president and chief procurement officer at Proxima, said: “It’s fair to say that the complexities of global supply chains continue to have CEOs around the world scratching their heads. The results of this year’s Barometer show that business leaders are spending more and more time tackling supply chain challenges, reflecting the multiple challenges to address. Perhaps most worrying is that concerns around human rights issues persist, but the findings also shine a light on just how multifaceted the decarbonization conundrum is. What is for sure is that amongst other priorities like right shoring, and investing in AI, there is a very definitely focus on cost reduction in the 12 months ahead.”