For the past nine years the Business Continuity Institute has conducted an annual survey into supply chain business continuity practices. The latest survey has been published, supported by Zurich Insurance Group.
The survey report shows that organizations with business continuity arrangements are eight times more likely to report greater supply chain visibility and two times more likely to insure for supply chain losses.
74 percent of organizations surveyed ask their key suppliers about their business continuity arrangements; a considerable increase from last year’s 63 percent.
Another important result outlined by the report is the use of technology and big data to overcome skills and resources gaps in supply chain management. The report shows that 63 percent of organizations do not use any technology to analyse, track, and monitor the performance of their supply chains.
Technology is not the only low uptake by organizations. The report highlights an increase in availability of insurance products against supply chain losses in the market. However, it showed that 51 percent organizations still do not insure against supply chain disruption at all.
The report concludes by underlining two other important aspects in supply chain resilience. The first is how reputation is still an important aspect in supply chain disruption, which requires organizations to become more aware of the issues around their supply chain and communicate effectively in times of crisis. The second is the element of collaboration, which still faces challenges in being implemented, but represents a great resource for effective supply chain management.
Other findings of the report include:
- Top causes of supply chain disruption: unplanned ICT and telecommunication outage, cyber-attack and data breach, and loss of talent and/or skills. Fire is the biggest increase this year in terms of threats to supply chain, jumping from 14th last year to the 7th biggest cause of disruption this year. On the other hand, terrorist acts and currency volatility have dropped out of the top ten.
- Impacts and/or consequences of disruption: loss of productivity (55 percent), increased cost of working (46 percent), and customer complaints remain as the top three impacts of supply chain disruptions.
- Economic impacts of disruption: more respondents (53 percent) reported losses for less than 50,000 euros compared to last year (33 percent). However, losses of more than one million euros have decreased from 34 percent to 22 percent.
Gianluca Riglietti CBCI, Research Manager at the BCI and author of the report, commented: “Supply chain disruptions have become increasingly tough for organizations to deal with. The current threat landscape requires very high levels of preparedness, as it includes a wide range of threats such as cyber attacks, terrorism, and natural disasters. Professionals understand this, which is reflected in the higher number of respondents (74 percent) adopting business continuity arrangements to deal with supply chain disruptions. However, there is still room for improvement, as more than one in five (22 percent) do not have full visibility of their supply chains. On a different note, it is also interesting to observe that the majority of respondents do not use technology to analyse the performance of their supply chain, which might raise the question of how a higher uptake of modern solutions could affect performance.”