A concerning dichotomy appears to be developing in the supply chain industry. According to a survey conducted by PwC, while the vast majority of businesses recognize the urgent need to reduce supply chain risk, only a startling minority appear to be investing in risk mitigation.
Disclosure of the Risk Perception Gap
As supply chains become increasingly complex and interdependent, the inherent propensity for risks increases. Recent global events, such as the COVID-19 pandemic and the obstruction of the Suez Canal, have highlighted the significance of mitigating supply chain risks.
Despite this, PwC’s survey exposes a startling fact: while the majority of businesses recognize the need for risk reduction, few are taking concrete investment steps.
The Extreme Contrast Between Acknowledgement and Action
72% of respondents to the PwC survey acknowledged that their supply chains bear high or very high levels of risk. However, only 39% of these businesses intend to increase their risk management investment over the next two years.
This disparity between recognizing risk and investing in risk reduction reveals a significant divide between organizations’ risk perception and risk management actions.
Obstacles to Investing in Risk Mitigation
While the survey does not delve thoroughly into the causes of this disparity, it does offer a few possible explanations. Inadequate understanding of the financial repercussions of supply chain disruptions, lack of C-suite involvement in supply chain issues, and the complexity of risk management in increasingly interconnected and global supply chains are examples of such challenges.
Urgent Requirement for Proactive Risk Management
The results of the PwC survey should serve as a wake-up call for enterprises worldwide. Due to the increasing complexities and interdependencies of contemporary supply chains, proactive risk management is no longer a luxury; it is a necessity.
To genuinely protect their supply chains from potential disruptions, businesses must do more than acknowledge risks. They must actively invest in robust strategies and solutions for risk management.
Concluding Remarks: Bridging the Gap
The chasm between recognizing supply chain risk and investing in its mitigation must be bridged as soon as possible. Given the increasing complexity of contemporary supply chains, it is essential for businesses to not only identify hazards but also take proactive measures to mitigate them. This includes making the necessary investments in risk management for the supply chain.
What do you believe is the greatest hindrance to supply chain risk reduction investment? How can businesses bridge the divide between risk perception and risk management? We encourage you to contribute your thoughts and observations in the section below.
The issue is not just awareness; it’s a complete lack of action. Businesses need to understand that risks are not going away. Investing in risk management should be a priority and not an afterthought.
‘Urgent requirement’? More like urgent requirement for them to wake up! Companies are so bogged down by their daily operations, they forget about potential disasters waiting around the corner.
‘Recognizing risks but not acting on them’ – sounds familiar in other areas too, doesn’t it? People love to talk big game but when it comes to action, it’s crickets chirping.
Honestly, who would have thought that knowing about risks and doing something about them could be so far apart? It’s like saying you know you should exercise but then choosing to binge-watch TV instead.
‘Binge-watch’ – exactly! It’s comical how companies act like they’re on top of things when they are clearly just procrastinating on a major issue.
‘Procrastinating’ or outright ignoring? If I were running a business, I’d be sweating bullets right now thinking about all those risks lurking around!
This article really highlights the cluelessness of many companies. They see the risks but do nothing? It’s infuriating! If they don’t take action, they deserve what happens next.
‘Chasm between recognition and action’? More like a canyon! Companies are digging their own graves by ignoring these issues. I can only shake my head at this level of negligence.
I don’t understand why these businesses can’t see the simple math here. If you don’t invest, you will lose money in the long run with supply chain disruptions.
I think this article is a great wake-up call for businesses! It’s about time companies start taking supply chain risks seriously. Ignoring this could lead to disastrous consequences. Let’s hope they listen!
Informative read! The statistics presented are startling, and I believe this is an important issue that needs to be addressed by all sectors involved in supply chains.
‘Urgent requirement for proactive risk management’ sounds like buzzwords to me! How often do we hear this and nothing changes? Actions speak louder than words!
! This makes me laugh so hard, companies acting like they care about risks while sitting on piles of cash without investing in safety measures. Classic!
This article is really eye-opening! It shows how many companys are aware of the risks but still don’t do anything about it. We need more awareness and action for sure!
I totally agree! It’s shocking how they say one thing but act completely different. They need to get their priorities straight.