Global Supply Chain disruptions on the rise

The research from 35 countries shows that over 70 percent of organizations recorded at least one supply chain disruption in 2010

By ·

A new survey from the Business Continuity Institute (BCI) has revealed serious levels of supply chain failure. The research from 35 countries shows that over 70 percent of organizations recorded at least one supply chain disruption in 2010.

The survey shows that while awareness of supply chain risks is increasing, many businesses remain exposed to high levels of risk. Sponsored by Zurich Insurance Company, the survey report concludes that outsourcing, in particular in IT and manufacturing, often ultimately reduces cost-benefits through greater exposure to supply chain disruption.

Further findings include:

• Adverse weather was the main cause of disruption around the world, with 53 percent citing it - up from 29 percent last year.
• Unplanned IT and telecommunication outages was the second most likely disruption and the failure of service provision by outsourcers was third, up to 35 percent from 20 percent in 2009. These incidents led to a loss of productivity for over half of businesses.
• The average number of identified supply chain risks in the past 12 months was 5, with some organizations reporting over 52.
• 20 percent admitted they had suffered damage to their brand or reputation as a result of these disruptions.

Lyndon Bird FBCI, Technical Director at the BCI, commented:

“The serious levels of supply chain disruption experienced by organizations around the world, coupled with the wide range of threats, underscores the business case for investment in business continuity management (BCM),” said Lyndon Bird FBCI, Technical Director at the BCI.

“Intelligently applying BCM to time sensitive supply chains is a vital risk mitigation technique and should especially underpin business decisions to extend or optimise supply chains.”

Furthermore, he said, BCM provides “peace of mind” that suppliers will be able to support you when they are faced with a disruption, and that your organization has workable plans in place to deal with and recover faster from supply chain disruption.”

The observations echo those made by analysts interviewed by SCMR.

“There likely won’t be a universal signal indicating that the economy is recovering, so businesses may not know when to adjust their models back to pre-recession levels,” said Dr. Robert P. Hartwig, economist and president of the Insurance Information Institute (III).

Speaking at the Council of Supply Chain Management Professional’s (CSCMP) annual meeting in San Diego earlier this year he noted that businesses often consider the costly consequences of facing a supply chain interruption, without considering the implications regarding risk.

“Having a supply chain that is not sufficiently prepared for increased demand can also present financial and reputational costs,” he said.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...