Cleo’s report highlights the value of investing in supply chain strategies for corporations

A recent study conducted by Cleo’s Supply Chain Earnings Impact Report has shed light on the direct correlation between enterprise value and investments in supply chain strategies. According to Cleo’s CEO, Mahesh Rajasekharan, disruptions have become a common occurrence in the supply chain landscape, making uncertainty the new norm. The past five years have been marked by various challenges, from pandemic-related shutdowns to geopolitical instability and climate-related crises. The research findings highlight the importance of embracing supply chain visibility, automation, and technology integration to not just survive but thrive in the face of these challenges.

One of the key findings of the report is that companies that prioritized technology integration, real-time visibility, and operational resilience enjoyed higher investor confidence and quicker stock price recovery post-disruption. On the flip side, organizations that failed to modernize their supply chains experienced prolonged disruptions, increased costs, and investor skepticism, resulting in slower stock performance.

The year 2022 was identified as a tipping point for supply chain volatility, with supply chain discussions making up 27% of earnings calls, a significant increase from just 2% in 2019. Despite the challenges posed by the pandemic, companies on average took four years to recover, with supply chain discussions decreasing to just 10% of earnings calls in 2024. Companies that focused on agile supply chains and expanded their networks saw growth, with 51% of companies that experienced stock price increases attributing their success to greater control over supplier onboarding.

The study also revealed that stock price recovery from supply chain disruptions took an average of 176 days, with one company taking over 1,000 days to regain its stock value post-disruption. Supply chain laggards cited disruptions and delays as major contributors to underperformance, with order backlogs playing a crucial role in distinguishing winners from losers. While 42% of companies with stock price declines identified backlogs as a challenge impacting earnings, 50% of supply chain winners leveraged backlogs as a strategic growth engine.

In conclusion, the Cleo report underscores the importance of investing in supply chain strategies to enhance enterprise value and drive business growth. By prioritizing technology integration, real-time visibility, and operational resilience, companies can navigate through disruptions more effectively and emerge stronger on the other side. Embracing supply chain visibility, automation, and technology integration is not just a competitive advantage but a strategic imperative in today’s volatile business landscape.