Most (72 per cent) FTSE 100 companies rate supply chain risk as a principal threat to their organisations, according to research by Boston Consulting group Inverto.

“The severity – and short notice – of disruptions in the Suez Canal and Red Sea were real wake-up calls for businesses,” said Lina Tilley, principal at Inverto. “They were a powerful reminder that a geographically distant and narrow supply base can become a major business risk.”

Risk management focus

Only 54 of the UK’s top listed companies provide details to shareholders on how they are managing supply chain risk, the researcher found. That suggests that many large businesses are still playing catch-up on their risk management systems.

“One way companies can reduce their supply chain risk is by having alternative supply chains,” Tilley said. “This can include building multiple supply chains in different countries to ensure that an unexpected impact on one doesn’t become a business-critical event.”

Businesses are also exploring how technologies can be used to create resilience in their supply chains. That has included rolling out stronger cybersecurity defences, using AI in supply chain design and monitoring, as well as using algorithms to identify high-risk raw materials. There has also been an increase in companies reviewing supplier finances and infrastructure to test their resilience, the research found.

Impact of US tariffs

Analysts have said that the potential impact of any trade tariffs introduced late January 2025 by incoming US president Donald Trump could put pressure on some supply chains. Given that the US is the largest importer of goods in the world, tariffs could have a significant impact on a number of businesses.

Such proposed tariffs could result in a “complex transformation” for the manufacturing sector, Dan Abramson, SVP of Growth Markets at the supply chain visibility specialist, FourKites, told Supply Chain magazine.

“The biggest winners won’t be those who simply move production, but those who use this moment to fundamentally redesign operations with more flexibility and redundancy built in,” he said.