Learning the lessons of disruption
The supply of energy has never been as critical, or contested, as it is today. The question of how we heat and light our homes and run our transportation — and how much it costs — is at the center of economic, political and social discussions.
Urgent action is needed to guarantee affordable supplies today and enable the transition to clean energy tomorrow.
But the supply chains that underpin both these objectives are struggling to meet demand.
Project times are lengthening and costs spiralling as companies compete to get the raw materials and equipment they need on time, putting future plans at risk.
How are energy businesses adapting?
To find out how the sector is navigating this challenging landscape, we surveyed 100 risk and supply chain leaders in sub-sectors including upstream oil and gas, downstream power generation and renewable energy.
How do they see the supply chain landscape? What are the main challenges and risks they face? What are they doing to overcome obstacles and try to build resilience? And what will the supply chains of the future look like?
Risks and uncertainty are growing
The risks that energy and power companies are concerned about in their supply chain reflect uncertainty and volatility in the sector as a whole.
Shortages, delays, price inflation and geopolitical instability were all top of mind for respondents to our survey. Wider external factors such as cybersecurity and supply chain sustainability were also leading concerns.
4 key findings
67% of businesses said that losses related to the supply chain had been higher or much higher than expected over the last two years.
39% named shortage of raw materials are as being among the biggest supply chain factors expected to impact their businesses over the next two years, topping the list of concerns.
84% said they have made at least some improvements in their approach to supply chain management in response to the pandemic.
83% cited a lack of insurance solutions as being among the greatest challenges to addressing their supply chain risks over the next 3 to 5 years.
Securing energy supply into the future
The energy sector is highly reliant on its supply chain to build, install and operate the critical equipment and infrastructure needed to power the world into the future.
Those dependencies will only increase as the business of hydrocarbons and thermal power transitions to renewables over the coming decades.
On that journey, the industry faces difficult supply chain challenges, from shortages of raw materials and critical minerals shortages to capacity constraints and a lack of alternative sources and suppliers.
Our survey shows that businesses are working to overcome these problems and considering a range of strategies to increase resilience.
However they’re hampered by an inability to get hold of enough accurate data on the supply chain to manage their risks.
Working more closely with suppliers as partners can help companies understand their supply chains better and address these risks.
Diagnostic mapping and monitoring tools, together with analytics can help to visualize, quantify and assess risks across the supply and in specific locations.
WTW has an experienced team of experts with the tools and competencies to help clients understand their supply chain vulnerabilities and align their production with financial risk.
We can also help you manage and transfer risks, for both property-related and pure economic losses, helping you build greater resilience against future shocks.
Download your report
To learn more, download your free survey report by completing the short form at the top of this page.
Disclosure
WTW offers insurance-related services through its appropriately licensed and authorised companies in each country in WTW operates. For further authorisation and regulatory details about our WTW legal entities, operating in your country, please refer to our WTW website. It is a regulatory requirement for us to consider our local licensing requirements.
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