Ineffective management of supply chains is leaving organizations open to severe disruptions and the high financial costs incurred as a result.
Caversham, UK – 10th November 2015: Nearly one in ten organizations are not aware of who their key suppliers are, leaving them open to severe disruption as they are unable to manage their supply chain effectively. That is according to a report published today by the Business Continuity Institute and supported by Zurich Insurance Group.
The Supply Chain Resilience Report highlighted that seven in ten organizations admit to not having visibility over their full supply chain, and as the survey also revealed that half of disruptions occur below the preliminary tier 1 supplier of goods, this makes it extremely difficult to establish where an organization lies within its suppliers’ priorities.
This could have major consequences when it comes to managing the supply chain and ensuring that disruptions are minimised, which is particularly important given that the report also found that 74% of organizations had suffered at least one disruption during the previous twelve months and that 14% had suffered cumulative losses of at least €1 million as a result.
Other findings of the report include:
- Unplanned IT and telecommunications outage (64%), cyber attack and data breach (54%) and adverse weather (50%) are the top three causes of supply chain disruption. New entries to the top ten are: product quality incident (8th), business ethics incident (9th) and lack of credit (10th).
- The top five consequences of disruption are loss of productivity (58%), customer complaints (40%), increased cost of working (39%), loss of revenue (38%) and impaired service outcomes (36%).
- One third (33%) of respondents report high top management commitment to supply chain resilience, increasing from 29% last year.
- About 7 out of 10 respondents (68%) report having business continuity arrangements in place to deal with supply chain disruptions.
Patrick Alcantara DBCI, Senior Research Associate at the BCI and author of the report, commented: “Recent incidents have shown us how supply chain disruptions can negatively impact an organization’s bottom line, reputation and resilience. This year’s Supply Chain Resilience Report demonstrates how good practice can mitigate the worst effects of these disruptions. With findings consistently showing top management commitment as a key enabler of supply chain resilience, we encourage business leaders to take a closer look at their supply chains and champion good practice across their organizations.”
Nick Wildgoose, Global Supply Chain Product Leader at Zurich Insurance Group, commented: “Through our work with customers in this area, we have found that increasing visibility along supply chains and resilience are major sources of competitive advantage. Top management leadership is the key to overcoming silo thinking about supply chains within an organisation.”
Now into its seventh year, the annual Supply Chain Resilience Report represents a long-standing working partnership between the BCI, Zurich Insurance Group and CIPS (Chartered Institute of Purchasing and Supply). It is now an influential and go-to industry resource that tracks the origins, causes and consequences of supply chain disruption across industry sectors and regions worldwide, as well as the overall evolution of risk. For example, the report has highlighted the greater risk of multi-tier exposure as well as simple direct supply chain exposure.
Likewise, Zurich’s involvement has helped reinforce the emergence of threats beyond just the physical to the less tangible risks, such as cyber risk. The report continues to benchmark business continuity arrangements in one place - including the uptake of insurance - in different organizations and is one of the most comprehensive, practitioner-led studies in the field. The BCI, Zurich Insurance Group, and CIPS involvement in previous surveys has and will continue to provide organisations with the much-needed critical insights and valuable information to support the development of appropriate strategic responses and approaches to mitigate the impact and consequences of disruptions within their supply chains.
For more information please contact the Senior Communications Manager at the Business Continuity Institute – Andrew Scott CBCI – by emailing email@example.com or by phoning 0118-947-8241.
- Download a full copy of the report by clicking here.
- Note to the online survey: 537 respondents were from 67 countries working in 14 SIC industry sectors. Approximately a third were from Europe and a third from North America.
About the Business Continuity Institute
Founded in 1994 with the aim of promoting a more resilient world, the Business Continuity Institute (BCI) has established itself as the world’s leading Institute for business continuity and resilience. The BCI has become the membership and certifying organization of choice for business continuity and resilience professionals globally with over 8,000 members in more than 100 countries, working in an estimated 3,000 organizations in the private, public and third sectors.
The vast experience of the Institute’s broad membership and partner network is built into its world class education, continuing professional development and networking activities. Every year, more than 1,500 people choose BCI training, with options ranging from short awareness raising tools to a full academic qualification, available online and in a classroom. The Institute stands for excellence in the resilience profession and its globally recognised Certified grades provide assurance of technical and professional competency. The BCI offers a wide range of resources for professionals seeking to raise their organization’s level of resilience, and its extensive thought leadership and research programme helps drive the industry forward. With approximately 120 Partners worldwide, the BCI Partnership offers organizations the opportunity to work with the BCI in promoting best practice in business continuity and resilience.
The BCI welcomes everyone with an interest in building resilient organizations from newcomers, experienced professionals and organizations. Further information about the BCI is available at www.thebci.org.
About Zurich Insurance Group
Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With more than 55,000 employees, it provides a wide range of general insurance and life insurance products and services. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, including multinational corporations, in more than 170 countries. The group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the six Swiss exchange and has a Level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.