RSM: Geopolitical Threats, Major Blind Spot for Supply Chain
According to RSM’s latest survey, just 30% of UK businesses are monitoring geopolitical threats.
Despite the extensive range of supply chain risks 36% also admit that their strategy needs updating.
These results follow the UK government’s report on risk and resilience that strongly emphasises the importance of robust and reliable supply chains.
Sir Chris Bryant, MP, Minister for Trade, Department for Business and Trade, says: "The UK’s prosperity and security depend on supply chains that are reliable, diverse and resilient. Recent global disruptions have shown how quickly these systems can come under pressure, and how shocks far beyond our borders can affect everyday life here at home.
“We are already seeing some of the risks highlighted in this report emerge in real time. It is a clear reminder that the world is changing, its norms are shifting, and we must be ready for a future that looks very different from the stability we once took for granted.”
Can businesses withstand global shocks?
Despite these blind spots, RSM found that 88% of businesses remain confident in that their supply chain can withstand global shocks, 24% are very confident and 64% are fairly confident.
This confidence still remains, despite 53% admitting they’d experienced more than one issue impacting their supply over the last year.
“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,” says Rich Hall, UK’s head of sustainability and ESG at RSM.
“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.”
Top risks to supply
RSM found that the top three risks included operational risk (58%), economic risk (56%) and cyber and technology risk (55%).
Despite these risks, 42% reported that their supply chain management is ‘well structured and proactive’ and 43% report that they felt ‘very confident’ in their supply chains for supply chain manger. However, the same can not be said for operational staff who only 19% were ‘very confident’.
“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,” says Mark Crawford, supply chain risk and governance lead at RSM UK.
“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.”
