Supply Chain Resilience is a Priority for Irish Businesses
23rd May 2023
New research from Grant Thornton has found that Irish businesses are among many firms who are reshaping their international supply chains, as they look to reduce risk, embrace opportunity and deliver value. It follows significant disruption facing mid-market businesses in recent years because of the war in Ukraine, the long tail of COVID disruption, and wider geo-political tensions.
Businesses have taken a variety of steps to increase supply chain resilience, from building inventory, to diversifying their suppliers, to setting up local manufacturing hubs and ‘friend-shoring’ – striking deals in sympathetic countries that are more politically palatable to shareholders and customers.
Elaine Daly, Partner, Head of Business Consulting, Grant Thornton Ireland (pictured above) said: “Many firms are striving to enhance their resilience through the implemen tation of several supply chain reconfiguration solutions.
These include supply base diversification and exploring localising operations, for example through nearshoring or re-shoring.”
“Overall, the impact of these approaches will depend on a variety of factors, including sector, resources, and the regulatory environment. However,
by investing in the right strategies and evaluating their options, firms can enhance their supply chain resilience whilst maintaining a focus on costs.”
Research also indicates that despite ongoing economic uncertainty, many international business leaders continue to see international trade, and particularly exports, as a key driver for growth.
Sara McAllister, Partner, Head of Risk Services, Grant Thornton Ireland said: “Ireland remains attractive as an FDI location and an outward looking exporter of high-quality produce. With that comes the opportunity for organisations to look to Ireland as an integral part of their supply chain system.
It is accepted that supply chain risk is a fundamental risk for any business today and given that trade is for the most part global, supply chains are by their very nature often multifaceted and complex to manage and oversee.”
“Managing supply chain risk optimally is critical to the success of a business given the level of reliance inherent within it. To manage risk requires transparency and as we look to the future that transparency is top of the agenda if Ireland as a country and the businesses who rely on Irish suppliers as part of their supply chain eco system are going to deliver on their sustainability and climate change promises.”
Although there are signs of an improving global economic outlook, mid-market firms are under no illusions about the difficulties ahead. Economic uncertainty and energy costs remain the top concerns globally with 60% of mid-market businesses citing them as a constraint to growing their business. Cybersecurity also remains a key concern for businesses, with the cost of cybercrime globally expected to hit $8 trillion this year.