Despite geopolitical tensions escalating, 66% of C-suite and operations leaders say they are confident or very confident that they can effectively mitigate the impact of geopolitical risks on their supply chain over the next five years, according to a survey of 600 global C-suite executives by operations strategy and transformation consultancy Argon & Co.
The findings, published in Argon & Co’s inaugural Operations Outlook report, highlight a worrying disconnect in supply chain risk perception. The research points to a growing need for businesses to strengthen operational resilience, as growing geopolitical volatility associated with the United States, China, Russia, and the Middle East are reshaping supply chain and sourcing strategies.
Industries with complex, global supply chains and extensive experience in managing geopolitical disruptions exhibit higher confidence levels, including life sciences (83%), logistics (82%), and fashion (73%). Yet, these industries also face some of the most significant exposures to these risks, including increased costs due to tariffs and disruptions to shipping routes.
The research suggests the relative lack of major disruptions over the past 12 months compared to the previous 5 years is fostering complacency, with just 25% of C-suite leaders citing geopolitical uncertainty as a major challenge impacting their operations over this period. However, intensifying trade tensions and protectionist policies means many leaders may be underestimating the scale of upcoming operational disruptions.
“There is a real danger present that operations leaders are overestimating their ability to withstand geopolitical risks – especially as we see tariffs being slapped on worldwide, regional conflicts intensifying, and disruption to major trade routes,” Ben Wright, managing partner at Argon & Co warns. “C-suite leaders cannot bury their heads in the sand – just surviving the previous issues doesn’t mean they can deal with these ones. Adopting a ‘resilience by design’ approach – like alternative sourcing models or relocating logistics hubs – will be crucial to shore up their defences. If Plan A fails, leaders must have Plans B, C, and D in place and ready to execute.”
Alongside the growing threat of geopolitical uncertainty, the research also found that C-suite leaders are struggling to balance competing priorities in managing disruption. Key findings are:
- Severe strain on supply chains: 55% of C-suite leaders report experiencing severe or substantial disruption to their supply chains over the past year, influenced by factors such as inflation, labour shortages, technological advancements, and global political uncertainty.
- Sustainability gaps: Only 34% of respondents feel fully prepared to meet Scope 3 sustainability requirements, highlighting a shortfall in ESG readiness.
- Technology as a disruptor: Keeping pace with rapid technological changes, such as AI and automation, was the biggest challenge for C-suite leaders over the past 12 months, cited by 49% of respondents.
The research also identifies areas where C-suite and operations leaders would like to see increased government support in mitigating the impact of future disruptions on their operations. 76% advocate for increased investment in emerging technologies, including AI, smart warehousing, and data analytics. A further 65% call for greater investment in workforce development, such as apprenticeship schemes, to build future-ready talent pools. Reducing red tape in supply chains and logistics is cited by 51% of respondents.
Wright concludes: “Today’s operations are shaped by a web of geopolitical uncertainties and trade disruptions, and this complexity means businesses can’t rely on past playbooks. This research shows an overwhelming demand for agility, resilience, and end-to-end visibility in our operations. This requires a real shift from reactive risk management to long-term, strategic planning – cutting through competing priorities and focusing on what truly drives value.”
