The majority of organisations in the energy, oil and gas sectors expect supply chain risk levels to increase over the next 12 to 24 months, given the ongoing volatility in global markets, a new report by Achilles has found.
The supply chain risk and performance management firm surveyed more than 300 industry representatives for its Achilles Global Supplier Risk and Sustainability Survey, and found that while most organisations in these fields reported ‘minor’ or ‘occasional’ supplier-related disruptions over the past two years, risk levels are on the increase.
As the study found, visibility across supply chains remains limited, with just 5% of organisations reporting having ‘full visibility’ over their extended supplier networks, while around two thirds have only limited or zero visibility.
This suggests that many energy firms are operations without a reliable view of their supply chains, in an environment shaped by operational pressures and increasing compliance requirements.
‘Highly-disrupted environment’
“The energy sector is currently operating in a highly disrupted environment, with supply constraints, geopolitical instability and market volatility placing significant pressure on operations,” commented Adam Whitfield, head of global compliance and ESG at Achilles. “In that context, visibility across supplier networks becomes increasingly important. Our findings show that many organisations still lack full visibility across their extended supply chains, which can limit their ability to respond effectively when disruption occurs.
“Managing risk in this environment requires more than periodic checks. As these pressures continue, strengthening supplier oversight and improving visibility will be critical to maintaining operational resilience and managing risk to ensure issues are identified early and managed effectively.”
Regulation and compliance
The study also highlighted the role of regulation and compliance when it comes to supply chain strategy, with legislation and regulatory pressures, particularly around sustainability and carbon reporting, identified as key drivers of action. However, with many firms operating across multiple jurisdictions, maintaining consistent standards and compliance requirements presents a challenge.
Elsewhere, it found that confidence in supplier readiness varies, with most organisations stating that they are ‘mostly’ or ‘moderately’ confident in the accuracy of supplier information. Only a small minority expressed ‘very high’ confidence’, however, indicating potential compliance and operational risk.
‘Overall, the data points to a gap between increasing supply chain risk and organisations’ ability to monitor and manage it effectively,’ Achilles noted. ‘As energy companies continue to operate across complex supplier networks, improving visibility and strengthening oversight will be critical to maintaining compliance and managing risk.’ Read more here.
