Origins, Causes and Consequences of Supply Chain Disruption
by Rolf Zimmer
Very few other topics related to procurement have gained as rapidly in importance in the past few years as supply chain risk management (SCRM). Global supply chains present companies with an opportunity to secure supply of products and materials they need at competitive costs.
Since 2009 the „Supply Chain Resilience Survey“ reports origins, causes and consequences of supply chain disruption in different industry sectors around the world.
Hard facts and numbers about supply chain disruption
The „Supply Chain Resilience 2014“ report by the Zurich Insurance Group shows some interesting figures and developments:
- 73.5% of respondents surveyed do not have full visibility of their supply chains.
- Only 26.5% of organizations coordinate and report supply chain disruption enterprise-wide.
- 81% of respondents report at least one instance of supply chain disruption last year. This represents a slight increase from the average of 78.6% since 2010.
- 51% of disruptions originate below the Tier 1 supplier. This represents an increase of 9% compared with 2013.
- Loss of productivity (58.5%), increased cost of working (47.5%), and loss of revenue (44.7%) were the most commonly reported consequences of supply chain disruptions.
- Taking a look at these key findings and increasing developments you realize that protecting the supply chain from serious and costly disruptions is indispensable.
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