Operational resilience in the current global environment
October 2026 | TALKINGPOINT | RISK MANAGEMENT
Financier Worldwide Magazine
October 2026 Issue
FW discusses operational resilience in the current global environment with Piers Bowley, Craig Edge and Alessandra Alleto at KPMG.
FW: How are organisations redefining operational resilience in a world where disruption is increasingly structural rather than episodic? Where are they overestimating their level of resilience today?
Edge: Operational resilience has fundamentally changed from preparing for occasional disruption to operating in a world where disruption is almost a constant. Over the last five years, organisations have had to deal with the pandemic, geopolitical conflict, trade friction, labour shortages and disruption to major shipping routes. What many businesses once considered stable is no longer guaranteed. I have seen first-hand how supply chains are often the first part of a business to feel these shocks, whether through extended lead times, logistics disruption or service failures. As a result, many organisations are regionalising operations and moving closer to customers. Where I see resilience being overestimated is around single points of failure. Common examples include dependence on single-source suppliers, reliance on outsourced partners for critical activities, and assumptions that established trading routes and relationships will remain stable indefinitely.
“Those that treat resilience as a core design principle, balancing risk, performance and cost, will be best placed to navigate the next wave of disruption.”
FW: How should companies balance efficiency and resilience when redesigning global supply chains?
Edge: I do not see efficiency and resilience as opposing objectives. The most successful organisations are designing supply chains that deliver both. Over the last few decades, many businesses optimised heavily for cost, centralising production into regional manufacturing hubs and leveraging global sourcing models. While that can deliver scale benefits, it can also increase exposure to transportation disruption, trade policy changes and rising logistics costs. In my experience, the biggest opportunities often come from revisiting fundamental supply chain design decisions. Network optimisation, supplier diversification, improved planning capability and better quality data can strengthen resilience while also reducing cost. Technology has a role to play, particularly in demand sensing and inventory optimisation, but poor data remains a common constraint. The biggest mistake I see is organisations investing in resilience as a reaction to the last crisis they experienced. A simple assessment of impact versus likelihood is often the best starting point. Invest heavily only where risk cannot be mitigated through better design or process.
FW: In what ways is working capital becoming a strategic lever rather than simply a financial metric?
Bowley: Working capital is more than just a financial metric. Every day removed from the cash conversion cycle can fuel an organisation’s strategic initiatives. Cash unlocked could be deployed to fund future M&A activity, deleverage balance sheets, increase dividend payments to shareholders, buy back shares or even fund organic growth, such as digital transformation programmes, research and development and strategic growth investments. The conversation has shifted from ‘how efficiently are we managing cash?’ to ‘how can cash help us execute our strategy?’ Growth consumes cash before it creates value. Broadly, three forces are accelerating the change – higher funding costs, increased shareholder focus on free cash-flow generation, and economic uncertainty and supply chain volatility. Together, these forces have elevated working capital as a strategic lever for growth, resilience and value creation opportunities. As such, leading organisations are those that are able to sustainably release cash across the operating cycle, deploying funds for strategic initiatives as a source of competitive advantage.
“The conversation has shifted from ‘how efficiently are we managing cash?’ to ‘how can cash help us execute our strategy?’”
FW: How are cyber risks reshaping perceptions of operational resilience at board level?
Alleto: Cyber risks are reshaping how boards view operational resilience. Increasingly, boards recognise that operational resilience depends just as much on preventing breaches as it does on the ability to continue delivering critical business services in the event of severe but plausible disruption. A major cyber breach – whether caused by a human error, a flawed software update or failure of a key third-party provider – can bring business operations to a halt within hours. As organisations become more dependent on digital infrastructure, technology resilience has become an expectation, as well as an advantage and a differentiator. The biggest shift is accountability. Frameworks such as the European Union’s Digital Operational Resilience Act and the UK’s emerging critical third parties regime are placing greater accountability on boards to understand and manage digital resilience risks. Considerably more scrutiny is being applied to impact tolerances, recovery prioritisation and scenario testing. In practice, organisations are beginning to apply the same resilience principles they have long used for physical supply chains to their technology estates, increasing oversight of critical third-party providers and the extent to which exit plans have been stress tested. The result is a broader definition of operational resilience – one that considers technology ecosystems and supplier networks as critical sources of potential disruption.
FW: What are the biggest blind spots organisations still have in managing third party and extended supplier risk?
Edge: One of the biggest blind spots remains visibility beyond tier-one suppliers. Most organisations have a reasonable understanding of their direct suppliers, but far less visibility into the suppliers supporting them. That becomes a problem when disruption occurs deeper within the supply chain. I am often surprised by how many organisations still assess suppliers primarily through a cost lens. Cost clearly matters, particularly in today’s economic environment, but supplier resilience, operational capability, financial health, joint value creation and geopolitical exposure can be equally important. The organisations that manage supplier risk well tend to focus on the critical few rather than attempting to monitor every supplier equally. They build strategic partnerships, maintain regular dialogue and invest time understanding where real vulnerabilities exist across their extended supply chain. Ultimately, effective supplier risk management is rarely about having more information, it is about knowing which relationships matter most and focusing effort where the consequences of failure would be greatest.
“The most effective organisations look at resilience through the lens of total landed cost and long-term value creation.”
FW: How can organisations better align operational resilience initiatives with long-term value creation?
Edge: Resilience is too often viewed as a cost centre rather than a value creator. In reality, organisations that spend their time responding to disruption are rarely able to focus on sustained productivity improvement, customer service or growth. One lesson is that theoretical efficiency and operational reality can be very different things. Businesses often optimise around unit costs while overlooking the impact of recurring disruption, recovery activities and service failures. If those issues occur regularly, they become part of your operating baseline and should be factored into decision making. I also think organisations make the mistake of applying traditional capital investment hurdles to resilience initiatives. Resilience investments are often closer to health and safety or environmental, social and governance investments, in that they protect value as much as they generate it. The most effective organisations look at resilience through the lens of total landed cost and long-term value creation. Done well, resilience and cost optimisation reinforce one another rather than compete for investment.
FW: Looking ahead, what capabilities will distinguish organisations that are genuinely resilient from those that simply appear resilient as the next wave of global disruption unfolds?
Alleto: The organisations that will stay ahead over the coming decade will be those that can do more than simply document their technology estate. True resilience comes from understanding the organisation’s resilience posture and the web of dependencies that underpin critical operations – from cloud platforms and software providers through to third-party managed services – and demonstrating ability to maintain critical services in the event of a disruption. The most resilient businesses are those that regularly stress test exit plans from third parties supporting critical business services, rehearsing failure scenarios rather than assuming continuity. Resilience is also built through robust day to day governance and availability of intelligence – including thresholds, service level agreements and key risk indicators – to enable effective oversight and drive risk mitigation or remediation. In our experience supporting technology M&A and transformation programmes, the difference is often clear: leading organisations engineer resilience into the design of their operations, while others rely on policies that may never have been tested in practice. As artificial intelligence accelerates automation and organisations become increasingly dependent on a smaller number of technology providers, resilience is becoming a strategic capability. Those that treat it as a core design principle, balancing risk, performance and cost, will be best placed to navigate the next wave of disruption.
Piers Bowley has over 14 years’ advisory experience across a wide range of industries, working with multinational listed corporates and private equity clients. He supports clients releasing cash tied up on balance sheets and has a proven track record for delivering cash improvement, operational cost saving and revenue enhancement programmes. He has also spent time in industry as a data analyst for a milling and manufacturing company privately held. He can be contacted on +44 (0)7821 305 620 or by email: piers.bowley@kpmg.co.uk.
Craig Edge is a director in KPMG’s operations and supply chain centre of excellence, advising on complex transactions, strategy and cost optimisation projects which require deep operational subject matter expertise. Prior to joining KPMG, he spent nearly two decades in industry, mostly working for PepsiCo in operational roles covering manufacturing, logistics and, latterly, transformation, where he was head of supply chain transformation for Central Europe. He can be contacted on +44 (0)7578 910 901 or by email: craig.edge@kpmg.co.uk.
Alessandra Alleto is a director in KPMG’s deal advisory team, specialising in technology, data and AI within financial services. She advises corporate and PE clients on technology due diligence, deal execution and post-deal transformation, helping unlock value and manage risk. Her experience spans complex transactions, regulatory reviews and leading high-performing teams across multiple concurrent projects. She can be contacted on +44 (0)7889 130 978 or by email: alessandra.alletto@kpmg.co.uk.
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