Australian organisations are among the world’s most vulnerable to major supply chain disruptions, with new research revealing that almost six in ten (59 percent) would be unable to maintain operations for more than three weeks if a significant shock struck tomorrow.
According to Proxima’s 2026 Global Supply Chain Resilience Outlook, while businesses are investing in resilience and boards are increasingly willing to pay for it, Australia’s geographic isolation and long supply chains continue to leave organisations exposed.
Based on a survey of 515 CEOs from businesses generating more than US$500 million in annual revenue across Australia, the UK, the US, Germany and Singapore, the report found just five percent of Australian businesses could sustain operations for four to six months, which is the lowest proportion of any market surveyed.
Globally, almost three-quarters of CEOs (72 percent) said they would accept supplier cost increases of more than 10 percent to guarantee resilience, with the average acceptable premium sitting at 17.3 percent.
Rather than passing higher costs onto customers, Australian businesses are taking a different approach to funding these investments.
Almost half of Australian CEOs (47 percent) said resilience initiatives would be funded through internal cost-saving measures, the highest proportion of any country surveyed.
A third (34 percent) said they would increase prices, while fewer than one in five said they would absorb the costs through reduced margins.
Lara Mujico, senior vice president at Proxima Australia, said Australia’s structural challenges also present an opportunity to rethink sourcing strategies.
“Australian businesses face a unique vulnerability due to geographic isolation and extended lead times,” she said.
“A supply chain shock that other markets might weather for longer creates a crisis for Australian operations within weeks.
“But we’re seeing something positive in that businesses are responding with strategic discipline. They’re investing in resilience, building local relationships and reconsidering concentration risk.
“The challenge is execution speed. Procurement teams are being asked to deliver resilience faster, but internal processes and capability gaps are creating friction.
“The businesses winning this cycle are those embedding procurement into strategy early, not treating it as a cost-control function.”
According to Proxima, procurement teams are becoming the focal point for much of this transformation.
Organisations are simultaneously being asked to diversify supply bases, manage increasing compliance obligations, implement new technology and deliver ongoing cost reductions, which is creating mounting pressure.
While the majority of Australian CEOs (84 percent) believe procurement processes are slowing AI adoption – well above the global average of 78 percent – businesses are already seeing measurable benefits from AI in supplier risk monitoring and cost modelling.
However, data quality, skills shortages and uncertainty around return on investment remain significant barriers to broader adoption.
The research also highlights the commercial impact of supplier disruption, with almost two-thirds (65 percent) of Australian CEOs saying a two-week disruption affecting their three largest suppliers would place between 11 and 20 percent of company revenue at risk.
Cyber risk is another growing concern, with 38 percent of Australian businesses reporting a supply chain disruption caused by a cyber incident during the past two years.
Only 29 percent said they have real-time visibility into the cyber risk exposure of critical suppliers, highlighting a significant gap in supply chain assurance.
Elsewhere, global uncertainty is prompting many Australian organisations to reconsider where they source products and services.
More than half (51 percent) of Australian CEOs said protectionist policies had increased domestic demand for their products, while many businesses are exploring more local and regional sourcing models.
“Australian businesses are actively reconsidering geographic concentration, nearshoring to Asia-Pacific, and building supplier relationships in markets with shorter lead times,” added Mujico.
“This shift reflects a strategic realisation that resilience requires proximity.”
