KUALA LUMPUR: A global survey conducted by KPMG International has found that 59 percent of chief executive officers (CEOs) in the Asia Pacific (APAC) are now more confident about global economic recovery compared to earlier this year.
However, they are also increasingly concerned about the risk to their supply chains, according to the KPMG 2021 CEO Outlook, which surveyed over 1,300 global CEOs about their strategies and outlook over a three-year horizon.
Among almost 500 CEOs in the Asia Pacific, 66 percent of CEOs in APAC stated their supply chains have been under increasing stress over the past 18 months.
It is thus unsurprising that CEOs have ranked supply chain risk as their top threat to growth this year, the consultancy firm noted.
"Pre-pandemic, risks to the supply chain had been steadily gaining attention due to increasing volatility from trade tensions and climate-driven events but were still considered a low priority for CEOs.
"However, the pandemic brought this issue into sharper focus as organisations struggled to maintain supply chain continuity during worldwide lockdowns," said the managing partner of KPMG in Malaysia Datuk Johan Idris in a statement.
KPMG said Asia Pacific CEOs continue to recognise the importance of building resilient, flexible supply chains, with 36 per cent having stated an intention to monitor deeper into their supply chain to better anticipate potential problems, while 34 percent would diversify sources of input by adding new locations of inputs to make their supply chain more resilient.
Meanwhile, 14 percent said they would prioritise reconfiguring their supply chain to provide greater resiliency and more consistent access to achieve their growth objectives.
Other findings in the outlook stated that 70 per cent of CEOs faced increased demands from stakeholders for more reporting and transparency on environmental, social, and governance (ESG) issues and 81 per cent believed that the government's stimulus would be required if all businesses are to reach net zero.
It also said while 68 per cent of CEOs were placing more capital investment in buying new technology, they were also looking to build human capability with 49 percent planning to invest in digital training, development, and upskilling to ensure employees’ skills remain future-focused.
"Just 18 percent of CEOs now say they are planning to downsize, or have already downsized their organisation’s physical footprint. This is a dramatic shift from August 2020 where 75 percent stated their intention to downsize their space," it said. - Bernama