Supply chains have been consistently on business agendas in recent years, and rightly so, with the pandemic, labor strikes, and inflation causing persistent disruptions and challenges for business leaders over the world. However, as inflation falls and market stability improves, are supply chains going to continue to be a focal point?
The short answer is yes. This year’s Supply Chain Barometer has made one thing abundantly clear: CEOs are expecting to spend even more time on supply chain issues in the coming year, with more than half of those surveyed industries saying so.
The Supply Chain Barometer is based on a survey of 2,000 CEOs of UK and US-based companies and has provided critical insights on the biggest issues and concerns businesses have when it comes to global supply chain challenges in the year ahead. So, what issues are front of mind, and how are business leaders responding?
Human rights issues are a key concern
We have seen some high-profile companies come under fire in recent years for human rights violations in their supply chains, and legislation has been tightened. These shifts are clearly plaguing the minds of CEOs, with 69% of respondents saying that they are concerned about the potential for human rights issues within their supply chains.
Perhaps unsurprisingly, given the recent scrutiny on the fashion industry, the retail sector is the most preoccupied with this issue, and close to 8 in 10 (79%) of CEOs told us it was a key concern.
Layoffs and nearshoring are not a passing fad
Inflation has forced job cuts across industries as businesses look to save on costs. The biggest stories hitting headlines have been coming out of the tech sector, but over a third (36%) of CEOs across industries are still considering layoffs to mitigate the impacts of inflation. This figure soared by almost 10% in comparison to responses to the same question last year, and layoffs are being increasingly seen as a good option to mitigate cost pressures.
Similarly, nearshoring, friendshoring, and onshoring are all being looked into by organizations as certain geopolitical relations sour and threaten to disrupt supply chains. Last year, just over a quarter (26%) of CEOs told us that they had actively looked at onshoring and nearshoring some or all of their supply chains. That number has now grown; over four in ten (43%) of CEOs with resilience problems are already either onshoring or considering it as an option.
Businesses are failing to put action behind their commitments to decarbonize
When asked last year, a quarter of CEOs surveyed said that they had been forced to delay their plans to decarbonize due to the impact of inflation. The picture is looking a little brighter this year, with 34% of those surveyed saying that they have a formal business plan in place for decarbonization.
Ultimately, however, this progress is not moving fast enough, and the reasons behind this sluggishness range from the complexity of the work involved, the cost, and the lack of access to data.
The challenge of decarbonizing supply chains is vast, and if businesses want to keep up with their commitments, it’s essential they learn from one another to accelerate action. Our recent Scope 3 Maturity Benchmark revealed the same symptoms: investment, talent, and credible strategies and planning are all lagging behind organizational commitments.
This year’s Barometer has demonstrated that business leaders are pondering more drastic changes to respond to challenges such as inflation and geopolitical disruption, such as job cuts or nearshoring, than last year. And, whilst inflation remains an enduring challenge, the landscape of challenges is more diverse and convoluted than before.
If you need to get to grips with the challenges of today, we can help. Complete the form below to read the insights from this year’s Supply Chain Barometer, or get in touch with us today.