The warning comes as conflicts in the Middle East and Ukraine continue with no clear resolution in sight, with each new flare-up threatening disruption to global supply chains.
A clear majority (58%) of UK CEOs surveyed by global procurement and supply chain consultancy Proxima said that if their top three suppliers were disrupted for two weeks, between 5% and 20% of their revenue would be at risk.
More than 40% (42%) of respondents expressed even greater concern, saying that 21% to 40% of their revenue would be in jeopardy, the highest proportion of any market surveyed by Proxima.
The data comes from the firm’s Global Supply Chain Resilience Outlook, based on a survey of more than 500 global CEOs at businesses generating more than $500 million in annual revenue.
CEOs willing to pay for resilience
Notably, Proxima found that 100 UK-based CEOs would accept an average uplift of 17% in their third-party supplier costs to guarantee supply chain resilience.
When asked how they would fund such an increase, 43% said they would pass higher costs on to customers, a higher proportion than in any other market surveyed.
Meanwhile, just three in ten (30%) said they would implement cost-saving measures, the lowest percentage recorded across all markets. More than a quarter (27%) said they would absorb the additional costs through reduced margins.
When asked about the biggest threats to their supply chains, 27% of UK CEOs cited climate change and extreme weather events, 21% pointed to protectionist policies, 19% highlighted conflict and geopolitical tensions, and 17% identified sustainability targets and regulatory requirements.
Cyber risks remain a key concern
The risk of cyber attacks also featured prominently, with more than half (52%) of UK CEOs saying their business had experienced a supply chain disruption caused by a cyber incident during the past 24 months, a higher proportion than in any other market surveyed.
At the same time, 45% agreed that significant revenue would be at risk if a key supplier fell victim to a cyber attack.
Despite this, the report found that most UK CEOs do not have real-time visibility of cyber risk. Less than half (45%) have conducted a full cyber resilience stress test across critical suppliers during the past 12 months.
Simon Geale, EVP at Proxima said: “At a time when the resilience of global supply chains is being tested like never before, our data shows that UK businesses are in the eye of the storm. As UK-based CEOs contend with an increasingly varied threat landscape which threatens to harm their revenues, it is no surprise that many are willing to pay more to reduce their risk.
“There are, however, no easy solutions. Awareness of vulnerabilities is one thing, but having a comprehensive risk mitigation strategy in place is quite another. Cybersecurity is a clear example of this, with our data uncovering a clear gap between awareness of the threat and tangible action among UK businesses.
He continued: “Looking ahead, it is crucial that supply chain resilience becomes a board-level decision across UK businesses of all sizes. Without clear visibility over their risk posture and vulnerabilities, businesses will be ill-prepared to counter the challenges that global volatility throws at their supply chains.”
