56% of global business leaders expect disruptions to severely hit operations: KPMG

New Delhi: As many as 56 per cent of global business leaders expect external disruptions, including geopolitical conflicts, energy shocks, cyber threats, trade uncertainties and climate-related events, to severely affect their organisations' operations, costs and performance over the next three to five years, according to a KPMG International report.

The report highlighted the growing challenge for businesses to prepare for disruptions that can spread across interconnected supply chains and affect multiple stages of operations.

It noted that 70 per cent of business leaders had reported an increase in their organisations' risk exposure over the past two years. Technology and artificial intelligence (AI) disruption emerged as the biggest concern for the next two years, identified by 64 per cent of respondents, followed by geopolitical conflict at 58 per cent and macroeconomic uncertainty at 48 per cent.


"Risks seldom happen in isolation," the report stated, highlighting how geopolitical tensions, technological disruptions, cyberattacks and resource scarcity can reinforce one another and trigger cascading effects across global supply chains.

The report also found that technology and digital dependencies were the most exposed stage of supply chains, identified by 46 per cent of respondents. Delivered costs and price volatility followed at 39 per cent, while shipping and logistics were cited by 33 per cent.

KPMG highlighted how disruptions to critical shipping routes, including those linked to tensions in the Middle East and the Strait of Hormuz, can spread beyond transportation to affect freight, insurance, financing and industrial production.

It also cautioned that suppliers operating across different countries may remain exposed to the same maritime routes and infrastructure.

To address these risks, 49 per cent of respondents said they were prioritising AI and predictive analytics to improve supply-chain resilience, while 44 per cent identified scenario planning and stress testing and 39 per cent focused on alternative sourcing strategies.

Anish De, Global Head of Energy, Natural Resources and Chemicals at KPMG International, said resilience had become a board-level concern.

"Resilience is no longer just a supply chain function, it has become a board-level imperative shaped by energy-linked disruption and a broader set of interconnected risks," he said.

The report said businesses need to move beyond traditional risk management towards continuous risk monitoring, scenario modelling and greater flexibility to protect critical operations against future disruptions.