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Article
Supply Chain Risk Management


POLITICAL UNREST CAUSING SUPPLY CHAIN PROBLEMS - SAP SURVEY

By Sean Ashcroft
October 25, 2022
4 mins
Business leaders told SAP that current supply chain issues primarily stem from
global political unrest (58%), lack of raw materials (44%) and rising fuel and
energy costs (40%). Only 31% cited inflation as a major contributor.
SAP business leaders survey shows third think supply disruption will last until
2023, & that global political unrest is main factor of supply chain issues

A new SAP survey finds that many senior business decision-makers expect supply
chain disruptions to run until well into 2023.

One in three says the issues will last until the end of summer 2023. More than
half (52%) think their supply chain still needs much improvement, while 49%
expect issues to last through the end of 2022. 

Business leaders told SAP that current supply chain issues primarily stem from
global political unrest (58%), lack of raw materials (44%) and rising fuel and
energy costs (40%). Only 31% cited inflation as a major contributor.

Looking ahead, the top three supply chain disruptions business leaders expect in
2023 are:

 * Reduced availability of raw materials in the United States (50%)
 * A slowdown in construction of new homes (44%)
 * Disruption to public transport due to lack of drivers (44%)


LOST PANDEMIC REVENUE STILL ISSUE FOR COMPANIES

In order to cover the extra costs of supply chain issues, more business leaders
say they’ve had to turn to wage or recruitment freezes (61%) and staff job cuts
(50%). Only 41% have chosen to increase the price of their products or services.

Regarding the upcoming holiday season, 73% of business leaders expect an
increase in e-commerce volume this season compared to last year. To sell their
own products, they plan to differentiate around:

 * Speed of delivery (64%)
 * Excellence of customer service (57%)
 * Availability of products (52%)
 * Sustainability credentials (47%)
 * Price reductions (42%)
 * Companies Are Fortifying Supply Chains for the Future

Every organisation said their supply chain needs improving to some extent, and
that they’re making big changes to prepare for future disruptions and to fortify
their supply chains. Business leaders plan to:

 * Adopt new technology to overcome challenges (74%)
 * Implement new contingency measures (67%)
 * Find new environmentally friendly supply chain solutions (58%)


MANY FIRMS MOVING AWAY FROM JUST-IN-TIME SUPPLY

Nearly two in three companies (64%) are moving from a ‘just in time’ supply
chain to a ‘just in case model by increasing the amount of inventory they store.

“The move to just-in-case means organisations will be storing more inventory to
help meet customer demand, but doing so also means increased cost,” said Scott
Russell, Member of the Executive Board of SAP Customer Success. 

He added: “Managing the supply chain is a constant balancing act. Over the past
couple of decades, the just-in-time approach traded resilience for efficiency
and lower costs, which in turn made the supply chain fragile. 

“Still, cost remains a factor, especially in the current economic environment.
Technology can help organisations strike the right balance by enabling more
real-time collaboration between trading partners.” 



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logistics industry that connects the world's largest supply chain & logistics
brands. Supply Chain Digital focuses on procurement and supply chain news, key
interviews, supply chain videos, along with an ever-expanding range of focused
procurement and supply chain white papers and webinars.

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