A new report from Ivalua has found that, in the past 12 months, 70% of businesses have had between one and five critical suppliers fail, while 41% say they’re one supplier failure away from a supply chain crisis.
Ivalua’s report, Building Resilience from the Ground Up: Anchoring Supplier Risk in a Unified System of Record, surveyed 800 supply chain and procurement decision-makers. It found that businesses take 25 days on average to identify and onboard a replacement supplier, during which 74% are exposed to shortages or significant operational disruption. More concerning still, 57% admit that they are reacting to these events rather than being proactive.
Reactive behaviours in response to disruption mean that much of this supply chain fragility goes undetected until it is too late. Over half of businesses (53%) have little to no visibility into the cyber security posture of their suppliers, and 51% admit that a major supplier cyber incident would catch them entirely by surprise. Other areas of limited visibility include ESG performance and risk (53%), financial health (44%), operational capacity and delivery performance (41%), and compliance status, including certifications and regulatory requirements (40%).
Supplier failure is no longer an exception; it is a cost of doing business. The organizations suffering the most aren’t necessarily those with weaker suppliers, but those blind to risks until it’s too late. With inflation, tariffs, and rising costs already stretching operations, a single supplier failure can be the tipping point that pushes an already strained supply chain into collapse.
Jarrod McAdoo, director at Ivalua
Closing the visibility gap
Businesses are also grappling with fragmented data, making it difficult to identify risks before they escalate. The findings show that 45% of businesses have no single, trusted view of supplier risk across the organization. Crucially, 76% still rely on manual processes for due diligence and risk checks on critical suppliers, with 58% agreeing that their reliance on spreadsheets leaves them exposed to human error. As a result, blind spots remain: over half (53%) report low or no visibility into their sub-tier suppliers, and almost three-quarters (73%) say they would like to spot supplier distress earlier to prevent disruption.
AI plays an important role in helping to predict supplier failure and plan for it holistically, but only 39% of businesses are currently using AI in supplier due diligence or risk monitoring. Further, AI’s potential is limited by the quality of the underlying data, with 50% agreeing that their supplier data is not AI-ready, limiting their ability to scale analytics and surface risk early.
Methodology
The survey was conducted by Sapio Research on behalf of Ivalua in March 2026. It is based on a survey of 800 supply chain and procurement decision-makers in the US (200), UK (200), Germany (200), and France (200).
