A third of surveyed businesses are actively planning to increase prices in the next six months to offset costs of continuous operational disruption, according to new research from the British Standards Institution (BSI).
A global survey of 1600 procurement, supply chain, risk, and operations professionals – conducted by Censuswide across Australia, the UK, the US, Germany, France, Italy, and Canada – reveals that persistent global shocks are trickling down directly to the end consumer.
To mitigate against potential or ongoing disruptions over the next six months, a third (33%) of respondents say their business plans to increase prices.
Furthermore, shoppers are set to face reduced choices and longer wait times for goods. The data shows that more than a quarter (28%) of surveyed Australian companies plan to reduce the range of products or SKUs on offer in the next six months, while 30% are already pausing new orders altogether, and a further 32% expect to do so within the year. The majority (85%) say they are currently or about to be warning customers about shortages, delays, or dependency risks.
A new normal
The research highlights that these challenges are being exacerbated by a lack of preparedness for what BSI’s resilience experts describe as “a new normal of near-constant disruption”, due to geopolitical turmoil, climate and weather-related incidents and digital transformation.
Looking back at the last six months, a period defined by extreme weather events and domestic climate pressures, the breakout of the Iran war, earthquakes in the Philippines and Venezuela, and severe heatwaves across Europe, four in 10 (40%) surveyed Australian businesses said they were fully prepared for raw material or component shortages, including scarcity of critical inputs.
This is despite 44% of surveyed Australian organisations having directly experienced climate and extreme weather disruptions in the past year, 39% suffering supply chain hits from geopolitical events, and a further 29% seeing issues arise due to raw material or component shortages.
Plans
The data shows how businesses are planning to respond to disruption, with almost four in five (82%) respondents currently or imminently stockpiling or building strategic inventory buffers, and nearly the same proportion (79%) currently or considering nearshoring their supply chain in the next 12 months. With key shipping routes disrupted and high levels of freight theft, 84% of those surveyed are already or planning to change modes of transporting products.
Looking at immediate action, in the next six months, close to a third (32%) of respondents expect to find new suppliers, while a quarter expect to shift trade routes (20%). One in four also said they expect to cut jobs or reduce recruitment due to supply chain pressures (25%).
Determined to adapt
Despite these headwinds, Australian business leaders remain determined to adapt.
87% of respondents express confidence that their organisation will be better prepared for supply chain disruptions in 12 months’ time, supported by rapid investments in technology: 83% are deploying AI predictive analytics for supply chain monitoring, and 81% are integrating real-time data across systems.
