**Global:** New research from Sphera reveals that 85% of supply chain disruptions emerge beyond Tier 1 suppliers, yet many firms rely on limited insights from primary sources, risking operational setbacks amid rising tariff volatility, ESG mandates, and supply disruption risks.
New research from Sphera reveals critical gaps in visibility across global supply chains, identifying rising challenges linked to tariff volatility, ESG mandates, and increased disruption risks. According to the findings, while 85% of supply chain disruptions originate beyond Tier 1 suppliers, many procurement leaders still depend on limited insights from these primary sources, potentially endangering their operations amid growing uncertainties in trade and regulation.
The study, which surveyed 500 senior decision-makers, including Chief Procurement Officers (CPOs) and Chief Sustainability Officers (CSOs), emphasizes the persistent reliance on Tier 1 relationships for assessing supplier risk. This reliance, however, highlights a significant blind spot; as the report indicates, disruptions are increasingly stemming from sub-tier suppliers, which represent the majority of risk factors plaguing supply chains today.
Sphera’s findings demonstrate that entrenched practices, such as the retention of upstream supplier data and continued manual risk assessments, hinder proactive identification of issues like supplier insolvencies, geopolitical bottlenecks, or environmental compliance failures. Alarmingly, nearly 70% of companies report struggles with data quality from Tier 2 to Tier 4 suppliers, and 26% continue to conduct risk assessments manually, despite the presence of digital platforms that could facilitate automated risk identification and adaptive supply planning.
Paul Marushka, CEO and president of Sphera, remarked on the implications of limited visibility: “When disruptions hit, businesses need options. Firms with limited visibility into their supply chain have risks and exposures stemming from sub-tier suppliers who may be vulnerable to disruptions.” These vulnerabilities can manifest as missed shipments, fluctuating prices, or breaches of regulatory compliance, all of which can have severe financial and reputational consequences, particularly for sectors with stringent ESG reporting requirements.
The study reveals a noteworthy evolution in the motivations behind enhancing N-Tier visibility. Nearly half of the respondents indicated that they are shifting focus towards deeper mapping for operational benefits, rather than solely for compliance with regulations such as the Corporate Sustainability Due Diligence Directive (CSDDD) or the EU’s Deforestation Regulation (EUDR). This perspective positions supply chain transparency as a competitive advantage, rather than merely a defensive strategy.
Marushka further articulated this strategic shift: “When disruptions hit, businesses need options.” He emphasised that the creation of these options relies heavily on comprehensive information. As leaders in procurement and supply chain management strive for increased agility, the capacity to trace and model risks at every tier is emerging as a crucial component of effective sourcing strategies.
Despite such awareness, progress remains sluggish. Many enterprises are still reliant on outdated tools and disparate systems that fail to yield actionable insights, resulting in a fragmented landscape of spreadsheets and legacy systems that promote reactivity over proactivity.
The overarching message of Sphera’s research points to a misalignment between where supply chain risks actually lie and where most organizations concentrate their mitigation efforts. For years, visibility at the Tier 1 level has been mistakenly equated with control. However, the current operational climate—marked by fragmented regulations, heightened environmental risks, and increasingly politicised trade dynamics—demands a reevaluation of this approach.
Future advancements in supply chain resilience will necessitate an evolution that goes beyond mere technological improvements. There will be a need to recalibrate longstanding supplier relationships, fortify transparency expectations within contracts, and adopt governance frameworks that regard visibility as an essential operational discipline, rather than just an occasional compliance audit.
Source: Noah Wire Services
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