Inverto: How CSCOs are Tackling the Supply Chain Polycrisis

The shape of global supply chain management is changing, with a growing number of companies shifting focus to risk mitigation amid what Inverto, part of Boston Consulting Group, describes as a "polycrisis".

The term refers to a combination of overlapping disruptions, from cost spikes and political instability to climate-linked disasters, that are exposing longstanding vulnerabilities in supply networks.

Inverto’s 2025 Risk Management in Procurement study reveals that 87% of businesses expect to restructure their supply chains within five years.

This growing pressure is forcing procurement teams to re-evaluate risk strategies and resilience planning, as disruption becomes less predictable and more frequent.

Examining supply chain risks

The study shows that 57% of companies experienced supply shortages within the last year. On top of that, 55% are struggling with higher procurement costs and financial uncertainty.

Energy costs have also become a concern, with 33% of respondents citing rising prices as a risk. A further 23% have faced disruption due to climate-related events such as floods, wildfires or droughts.

As risks multiply, their cumulative effect is reshaping procurement priorities. Thirty-seven percent of firms now rank supply chain risk as their leading operational concern.

The research finds that traditional models of risk planning are no longer effective, as disruption now stems from numerous interlinked sources.

Lina Tilley, a London-based Principal at Inverto, says: "Businesses are no longer just contending with single points of disruption — they’re facing multiple overlapping crises that have exposed any fragility of their supply chains.

"To stay competitive and even profitable, businesses must place ever greater emphasis on how they manage supply-related risk. This is an area which many procurement departments used to be able to treat as an afterthought, or nice add-on.

"It has now become a central requirement for all category strategies."

Organisations are starting to adapt. Supply chain resilience is becoming a strategic imperative, not just a logistical one.

Some companies are responding by widening their supplier base, while others are increasing buffer inventories or fast-tracking contingency plans.

Supplier audits are also becoming more frequent, aimed at identifying weak links before they cause disruption.

The climate issue

The impact of climate change is contributing to more direct interruptions to supply. One in four businesses in Inverto’s research report experiencing supply chain disruption caused by environmental factors.

These include infrastructure damage from flooding or fire, resource limitations during droughts and factory shutdowns caused by heatwaves.

Climate and energy risks are not just operational; they also affect sustainability and long-term cost management.

The polycrisis model put forward by Inverto suggests that no single risk is responsible for today’s instability.

Instead, threats overlap and intensify each other, making it harder for businesses to rely on steady global supply flows.

The result is a growing awareness that supply chains must be designed not for efficiency alone, but for adaptability.

According to Lina, the current risk environment "has exposed any fragility of their supply chains" and the number of companies naming supply risk as their main concern is expected to increase further.

A need for AI

Despite the availability of advanced tools, the report finds that only 45% of companies use artificial intelligence (AI) to monitor or manage supply chain risks. AI can help firms anticipate disruption, model risk scenarios and make more informed procurement decisions.

Yet many still rely on outdated methods, potentially slowing their response in a volatile environment.

The UK leads other European countries, including Germany and Italy, in using AI for supply chain risk.

However, Inverto warns that this lead could narrow unless British firms continue investing in digital systems and integrating them across procurement operations.

Lina says: "AI and other digital tools play a crucial role in creating transparency – a crucial basis for more agile, responsive supply chains."

She adds: "Companies that take a proactive, tech-enhanced approach to risk management will enjoy better forecasting and will therefore be better placed to anticipate disruption and respond proactively."

If companies want to tackle the fragility in their supply chains head on, they need to adapt to growing technological advancements, or risk falling behind competitors.