Companies see supply chain disruption as biggest risk to growth, spurring investment

Rising energy and materials prices concern industry execs, who hope technology will increase resilience

Image by Gerd Altmann from Pixabay

Nine in ten organisations with more than $1bn in annual revenue believe supply chain disruption is the most likely factor to drag down their growth in the next 18 months.

The result, which comes from a Capgemini survey of 2,000 in 15 countries, found that the next biggest concerns were rising raw material prices, (67%) and the energy crisis (64%).

These issues are increasing interest in supply chain technologies among executives. In the survey, 43% of executives are planning to increase investments in their supply chain by focusing on technologies which help agility, transparency and visibility.

The aim is primarily to reduce costs, execute faster decision-making by leveraging cloud, data and analytics. Nearly 50% also plan to spend more on cybersecurity.

Capgemini said that key strategies would also include onshoring or nearshoring, regionalising supplier bases and reducing reliance on one single geographic region for manufacturing, with Western European supply chains leading this diversification charge.

Reuters Events, Supply Chain research has also found that European firms are prioritising supply chain reconfigurations, with Poland and Germany noted as the two most attractive countries to shift material and component sourcing to as companies seek shorter and more resilient supply chains.

Aiman Ezzat, CEO of Capgemini, says companies “should seize the opportunity that technology offers, not only to make their business more efficient, sustainable, and resilient, but more importantly to enable long-term growth opportunities. It is also essential to invest in the talent that will be able to deliver on these business-model and value-chain transformations, without sacrificing overall employee experience. These areas of investment are vital for organisations to not only weather the uncertain environment but emerge stronger and more resilient in the future.”

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