Business Continuity Pros Lack Full Supply Chain Visibility
A global survey of more than 500 business continuity executives found that a large majority lack full visibility into their supply chains and – consistent with findings in previous years – had experienced at least one disruption in the past year.
The recently published Supply Chain Resilience 2013 report, based on a survey of professionals in 71 countries, found that 75 percent of respondents reported a lack of full visibility into their supply chains.
The same percentage reported at least one supply chain disruption during the past year, with 42 percent of disruptions originating below the tier-one supplier, the report from the Caversham, UK-based Business Continuity Institute said.
Fifteen percent of respondents experienced disruptions costing more than (euro) 1 million, or roughly $1.35 million, while nine percent experienced a single disruption that cost more than that amount, according to the survey, which is sponsored by the Zurich Insurance Group and the Chartered Institute of Purchasing and Supply.
“It is clear from the results of this survey that supply chain disruptions continue to have a significant impact on business performance and the problem is not being effectively managed. One of the key challenges is to get consistent top management support for investing in improved supply chain resilience,” the fifth annual BCI Supply Chain Resilience survey said.
Sixty-two percent of those surveyed reported that their top managers either lacked a commitment to managing the supply chain or were inconsistent in their commitment, according to BCI.
Among other findings:
–The top three disruption causes were unplanned IT or telecommunications outages, adverse weather and outsourcer service failures. In the U.S., adverse weather was the top source of supply chain disruption this year.
–The top two consequences of supply chain disruptions were productivity loss and customer complaints. These were followed by increased cost of work and impaired service outcome.
–Survey respondents considered technology to be the biggest supply chain risk in the next 12 months, followed by regulations.
–Forty-nine percent of respondents said no more than half of their key suppliers have business-continuity plans for their own needs.
“This lack of visibility demonstrates just why it is important for businesses to start managing their supply chain more effectively. The supply chain can be complex and is only as strong as its weakest link, so with more than four tenths of disruptions occurring below the tier one supplier, businesses must ensure that all those down the chain have systems in place to deal with disruptions. Business continuity plans should be used as an incentive for winning/awarding contracts.” Lyndon Bird, technical director at the BCI, said in a Nov. 7 press release.
David Noble, group chief executive officer at the Chartered Institute of Purchasing and Supply, said, “The loss of talented individuals to manage supply chains remains a significant issue and demonstrates that trained and highly skilled people will continue to be in demand. … Following this research it appears that until CEOs give it the recognition it deserves, disasters will continue to affect organizations.”
