In today’s volatile business landscape, supply chain risk management has emerged as a mission-critical priority. Companies are confronting a complex web of disruptions, rising procurement and energy costs, political unrest, and climate-induced disasters, that Inverto, a division of Boston Consulting Group, terms a “polycrisis.” This new reality is forcing firms to rethink how they design and safeguard their supply networks.
According to Inverto’s latest research, 2025 Risk Management in Procurement, a striking 87% of companies plan to overhaul their supply chains within the next five years. The scale of this shift underscores just how urgent resilience and adaptability have become in the face of persistent, overlapping shocks.
The report reveals that 57% of companies experienced supply shortages in the past year alone. Over half (55%) grappled with surging procurement expenses and financial unpredictability, while 33% cited soaring energy prices as a significant business threat. Meanwhile, climate-related incidents, ranging from wildfires and floods to droughts, impacted nearly a quarter of respondents, underscoring the growing role of environmental factors in supply chain vulnerability.
These converging challenges are reshaping procurement priorities. Supply chain risk has moved from a secondary concern to a top operational risk for 37% of companies, reflecting how the traditional approach to risk management is no longer adequate.
Lina Tilley, Principal at Inverto’s London office, highlights the paradigm shift:
“Businesses are no longer dealing with isolated disruptions. They face multiple, intertwined crises that expose every weak link in their supply chains.”
For companies to remain competitive and profitable they must embed risk management at the heart of procurement strategies. What was once a peripheral consideration is now a foundational element across all sourcing categories.
Procurement teams are responding by building resilience: diversifying suppliers, increasing inventory buffers, and enhancing supply chain visibility. Accelerated supplier audits and robust contingency plans are becoming essential tools to brace for future shocks.
As climate change accelerates, its impact on supply chains deepens. One in four businesses reports direct effects from climate-related events, such as infrastructure damage from floods and fires or resource shortages during droughts. Combined with rising energy costs, these pressures force companies to confront tough questions about sustainability, cost management, and continuity.
The ‘polycrisis’ concept captures how risks don’t exist in isolation, they compound and amplify one another, undermining the stability of global supply flows. Lina Tilley warns, “The current environment has laid bare the fragility of many supply chains,” and anticipates that supply chain risk will become an even greater concern in the coming years.
Despite the availability of advanced digital tools, only 45% of companies currently deploy AI to assess and manage supply chain risks. AI has the potential to spot vulnerabilities, predict disruptions, and empower smarter decisions, but many firms have yet to weave it into their core procurement processes.
Interestingly, the UK leads Europe in AI adoption for supply chain risk management, outpacing countries like Germany and Italy. However, Inverto cautions that this lead could slip away if digital investments don’t accelerate.
“AI and other digital solutions are vital for creating the transparency needed in today’s fast-moving supply chains,” Lina explains. “Companies that adopt proactive, tech-driven risk management will enjoy superior forecasting, enabling them to anticipate and respond to disruption before it escalates.”