Geopolitical tensions, cyber-security risks, and a shifting technology landscape threaten to disrupt supply chains like never before—and the costs associated with those threats are weighing heavy on CEOs.
More than 80% of US-based CEOs say that up to a fifth of their revenue would be at risk if their top three suppliers were disrupted for two weeks, according to research from procurement and supply chain consultancy Proxima, released this week. The remainder said that 21% to 40% of revenue would be in jeopardy if their top three suppliers faced disruption.
Proxima surveyed more than 500 CEOs from around the world whose companies generate more than $500 million in annual revenue. The results appear in the company’s Global Supply Chain Resilience Outlook.
But CEOs are willing to pay a premium to reduce the risks they’re facing: The 104 U.S.-based CEOs surveyed said they would accept an average increase of 17% on their third-party supplier costs to guarantee supply chain resilience, for example. Seventy percent said they would accept an increase of 11% or more, according to Proxima.
When asked how they would fund those increases, 38% of US-based CEOs said they would implement cost-saving measures, and 36% said they would pass price rises on to customers.
More than a quarter (27%) said they would absorb the costs through reduced margins.
When asked which threat poses the greatest financial challenge to their supply chain, 30% of US-based CEOs cited conflict and geopolitical tensions—the highest percentage of all markets surveyed. This was followed by emerging technologies (20%) and sustainability targets and regulatory requirements (20%).
The research also found that emerging technologies (25%) and sustainability targets and regulatory requirements (25%) are the two threats that US-based CEOs believe their peers underestimate most.
Cybersecurity remains a top concern as well. Almost half (47%) of U.S. CEOs said their business had experienced a supply chain disruption caused by a cyber incident in the past 24 months. At the same time, 37% agreed that significant business revenue would be at risk within their organization if a key supplier fell victim to a cyberattack.
Despite this, the data finds that the majority of US-based CEOs do not have real-time visibility on cyber risk. Less than four in ten (39%) said they have conducted a full cyber resilience stress-test across critical suppliers in the past 12 months. What’s more, just 41% said they believe their business has real-time visibility into the cyber risk exposure of their critical suppliers.
Taken altogether, the threats create a vital need for better risk mitigation strategies, according to Simon Geale, Proxima’s executive vice president.
“We are seeing first-hand how U.S. businesses are being impacted by geopolitical uncertainty, with the ongoing conflict in Iran and President Trump’s tariffs regime leaving many CEOs feeling exposed. Amid this backdrop, businesses cannot afford to lose focus on supply chain resilience, and it is no surprise that many are willing to pay more to reduce their risk,” Geale said in a statement announcing the survey’s findings. “With a volatile threat landscape, having a comprehensive risk mitigation strategy is now non-negotiable for businesses. In an increasingly litigious society, where businesses who fail to prepare can face legal challenges from shareholders, boards must recognize the importance of supply chain resilience.”
