INSIGHT 3
86% of CEOs see a resiliency challenge in their supply chains
As the future of supply chains continues to evolve and globalization makes somewhat of a U-turn, CEOs are seeking different ways to build resilience against predictive and unforeseen risks.
The research shows that global CEOs are marginally more confident in their resiliency, with 14% professing they do not see a resiliency problem within their supply chains versus 10% in the previous year. That said, it leaves a (still) significant 86% of CEOs who do see a resiliency problem.
With a marginal lead, figures were highest in CEOs opting to set up new additional supply arrangements to complement the existing, at 46%. However, adding additional oversight to supply arrangements and moving supply in its entirety closely follow, with 44% and 42%, respectively. What’s clear is that there is no single silver bullet, but multiple active strategies are underway.
Larger organizations are least likely to move supply in its entirety (35%), perhaps reflecting greater investment into complex supply chains that are difficult to unwind. They are, however, the most likely to be dual or multisource.
As we look at specific sourcing strategies—onshoring, offshoring, friendshoring, and nearshoring—larger organizations also focus more on offshoring and notably less on onshoring (25% below overall). Larger organizations aside, the strategies are highly consistent. Although offshoring is the lowest-scoring strategy for each region, it is still a core strategy, reflecting the many advantages that have built up over time.
Automotive (53%), Communications and Hi-Tech (52%), and Construction (51%) are most likely to onshore, perhaps reflecting an increasing desire to protect “high-value” supply chains, deemed to be key to economic prosperity, healthcare, and defense over coming years. Increasingly, governments are intervening to ensure resilience by implementing strategies to safeguard critical goods such as medicines, minerals, and semiconductors.
Onshoring trends, particularly in DACH and the US, can bring these supply chains closer to home, fueling job and skills growth. Sectors showing a low offshoring percentage (for example, Financial Services at 31%) could reflect the maturity or saturation of offshoring as a core strategy, signaling alternative approaches to diversify supply. Whilst deglobalization is a thing, it is not uniform across different sectors and markets.