Supply chain business continuity incidents explored

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Published: Friday, 03 April 2015 13:16

Resilinc has published its 2014 supply chain events annual report which summarizes and analyzes nearly 700 unique supply chain notifications and alerts generated by its EventWatch 24X7 global event monitoring and alert reporting service.

The annual report analyzed incidents by risk type, industry, geography, severity, and seasonality and compared 2014 data in these categories with 2013. It also revealed The EventWatch Top 5 supply chain events of 2014. The top 5 event ranking was driven by estimated aggregate revenue impact. This was calculated leveraging Resilinc’s database of over 40,000 suppliers and over 400,000 parts which are tracked in its cloud supplier intelligence repository. Information on the associated number of suppliers impacted and average site time to recovery (TTR) for each event is also detailed in the report.

The top five 2014 events were:

1. Typhoon Halong in western Japan with a revenue impact of over $10 billion,
2. Severe flooding in Long Island, New York with a revenue impact of over $4 billion,
3. Typhoon Rammasun in China and Vietnam with a revenue impact of over $1.5 billion,
4. The Taiwan gas explosions with a revenue impact of over $900 million, and
5. The Intel hazardous chemical spill in Arizona with a revenue impact of over $900 million.

“This was a good year for supply chain events as there were no severe disruptions on the scale of the 2011 Thailand Floods, the 2011 Japan Earthquake and Tsunami or 2012’s Hurricane Sandy,” said Shazaib Khan, Resilinc EventWatch program manager. “It is important to keep in mind, however, that a common misstep that organizations make is placing too much emphasis on planning for the highest impact risks and disaster scenarios. Supply chain impact research indicates that smaller, more frequent disruptions are more costly in aggregate than those precipitated by high-impact, but infrequent events.”

Key report highlights:

• For the second year in a row factory fires/explosions were the most common supply chain event followed by employee strikes and hurricanes/typhoons.
• The top three industries for supply chain business continuity events for 2013 and 2014 were automotive, high-tech and life sciences.
• In 2014, the preponderance of supply chain events emanated from North America, followed by RoW and Europe. 2014 was a less ‘eventful’ year for Asia for which only 111 events were reported compared to 125 in 2013.
• The combined number of events rated severe and high in potential disruption impact was up 12 percent in 2014 compared to 2013. However, the number of severe events was down 41 percent year over year.

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