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Survey Report

Complex Manufacturing Supply Chain Risk Report 2023

April 13, 2023

WTW surveyed 100 senior decision makers in leading manufacturing companies globally, to understand their supply chain risks and challenges, their organization’s approach to risk management and what future supply chains will look like.
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Learning the lessons of disruption

For decades inventory has been the enemy of efficiency in manufacturing.

With just-in-time systems, businesses could rely on globalized supply chains to deliver what they needed when they needed it without the need to hold buffer stocks.

But the disruption of recent years has exposed the vulnerability of those long supply chains, and patchy visibility beyond the first tiers of the chain.

It’s forcing companies to reassess everything from how and where they source components to how much they keep in stock.

How are manufacturing businesses adapting?

To find out how complex manufacturing sectors are navigating this changing landscape, we surveyed 100 risk and supply chain leaders from automotive to medical devices, industrial engineering to shipbuilding.

How do they see the supply chain landscape? How are they building resilience? What are the main challenges and risks they face? And what will the supply chains of the future look like?

Risk factors are rising for complex manufacturers

The more complex your manufacturing processes and components, the more potential there is for things to go wrong in your supply chain.

Our survey found businesses are worried about a wide range of factors, from shortages and future pandemics to climate, geopolitics, cyber, sustainability and reputational risks.

Climate and environment

Half (50%) of respondents placed climate change and environment among the top global trends affecting supply chain risks.

Manufacturers are feeling pressure to reduce and disclose emissions from production and transportation.

Impacts such as extreme weather and rising sea levels are also a concern at many supplier locations: natural disasters topped the list of supply chain factors believed to have the greatest impact in the next two years at 41%.

Almost three-quarters (74%) named natural resources as the environmental factor posing the greatest supply chain risk to their business, reflecting concerns over issues such as water availability.

Geopolitical risk

Geopolitical risk was among the factors thought to have the greatest impact on supply chain risks, rated by 54% as medium and 29% high impact.

Tensions between China and the West are calling the long term future of globalized supply chains into question.

The Russia-Ukraine conflict is also having an impact, both on energy supply and sourcing of components such as wiring looms for cars, most of which were made in Ukraine.

Gray zone aggression where states use nonmilitary threats such as trade tariffs to penalize foreign companies are also an increasing concern, pushing organizations to look closely at where they locate their assets.

Economic risks

Economic uncertainty emerged as the biggest factor underlying supply chain risks, ranked by 33% among their top concerns.

A volatile global economy is making it harder for many manufacturers to plan future production.

Businesses are feeling the strain of price and wage rises, fuel and energy costs and falling consumer demand.

However, if inflation dips back to near normal levels by the end of 2023, it could ease some of these pressures.

Shortages and disruption

The threat of supply chain disruption remains real for complex manufacturing businesses.

Energy or other service interruptions (36%) was named as the second biggest supply chain factor expected to impact businesses over the next two years, followed by logistics and warehousing shortages (35%).

Supplier capacity constraints (31%) and materials shortages (29%) were among the top underlying factors affecting supply chain risks.

Cyber risks

Concerns over cyber risks in the supply chain are growing. In our survey 50% rated cyber as having a medium impact on supply chain risks and 35% high impact.

Growing digitalization and automation can increase the risks of cyber-attacks on suppliers.

Increased risk may also come from greater data sharing and partners using linked systems, which can add potential weak spots for cyber criminals to exploit.

Attacks in the supply chain can lead to delays in ordering and delivery and potentially put manufacturer systems at risk.

ESG and reputation

As well as meeting climate responsibilities, manufacturing is under regulatory and public pressure to source responsibly and sustainably.

In our survey 89% said sustainability was a key goal for their supply chain, while 81% said that ESG is a specific selection criteria when selecting new supply chain vendors.

These concerns may also feed into perceptions of reputation risk: 84% said reputation had a either a medium or high impact on their supply chain risks.


Though we may be past the acute disruptive impacts of Covid-19, the risk of a new strain of the virus, or a new unforeseen pandemic, seems to be still front of mind, topping the list of global trends with the greatest influence on supply chain risks at 58%.

4 key findings

60% said losses related to the supply chain had been higher or much higher than expected over the last two years.

83% of businesses said they have made at least some improvements in their approach to supply chain management in response to the pandemic.

78% agreed or strongly agreed that a lack of suitable alternative suppliers restricted their ability to implement and effective dual or multi-source strategy.

74% named natural resources as the environmental factor posing the greatest supply chain risk to their business.

Managing supply chain complexity

Complexity in manufacturing is about more than technology and processes.

It’s also the sheer number of moving parts that all need to be in the right place at the right time to keep production moving.

The lessons of the last few years are pushing many sectors to move from a globalized just-in-time world to a more regional approach with greater buffers built into supply chain systems.

That comes at a price and companies need to work out how far they want to build resilience at what cost to them and their customers.

In managing these challenges, they also need to juggle external factors, from cyber threats to geopolitical instability, climate and sustainability.

Our survey suggests that businesses are working to overcome problems and considering a range of strategies to increase resilience.

But they’re hampered by a lack of appropriate insurance solutions and the data needed to accurately assess and manage their risks.

Working more closely with customers and partners can help companies understand their supply chains better and address these risks.

Diagnostic mapping and monitoring tools and analytics can help to visualize, quantify and assess risks across the chain and in specific locations.”

Graham Edwards | Head of Sales & Client Management, Asia

Diagnostic mapping and monitoring tools and analytics can help to visualize, quantify and assess risks across the chain and in specific locations.

WTW has a highly experienced team specialized in supporting global, complex manufacturing organizations. We have the tools and competencies to help clients understand their supply chain risk exposures and produce customized risk treatment solutions.

We can help you to:

  • Assess, quantify and mitigate supply chain risks
  • Manage and transfer risks for both property-related and pure economic losses
  • Optimize risk financing and loss management
  • Build greater resilience to future shocks

Please get in touch to find out how WTW can support your organization.

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To learn more, download your free survey report by completing the short form at the top of this page.


Graham Edwards
Head of Sales & Client Management, Asia

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