How weak are your supply chain links?

Roger OakdenSupply Chains & Supply Networks

What are your risks from a disruption?

A recent report by Zurich Insurance in England indicates the potential supply chain challenges for businesses in many countries, including  yours. The study, of 500 businesses across multiple industries with sales to 300m UK pounds (U$471m), showed that supply chain challenges remain high.

Concerning supply chain performance; 80 per cent of respondents said it was very important or critical. Yet 88 per cent had experienced supply chain induced disruptions to their business, with the average length being five weeks.

Losses in customer orders and sales was experienced by 60 per cent of respondents. Business reputation was affected by 43 per cent and 43 per cent incurred higher costs. Could these figures apply to your business?

Despite the potential for loss, 55 per cent of respondents had not undertaken any review of their supply chains in the past six months. The reasons given were insufficient time and too expensive. Yet the cost to a business from disruptions in their supply chains can be high.

Respondents identified an average of 48 critical suppliers; these are critical inbound supply chains that require review. This means about one supply chain per week to be evaluated from a strategic viewpoint. It requires the capability of a supply chain analyst to understand the risks and and to develop the continuity plans required under worst case scenarios.

Do you and your colleagues know the potential supply chain risks in your business? Have you identified or made the investment in skills to evaluate those risks and prepare continuity plans?

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About the Author

Roger Oakden

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With my background as a practitioner, consultant and educator, I am uniquely qualified to provide practical learning in supply chains and logistics. I have co-authored a book on these subjects, published by McGraw-Hill. As the program Manager at RMIT University in Melbourne, Australia, I developed and presented the largest supply chain post-graduate program in the Asia Pacific region, with centres in Melbourne, Singapore and Hong Kong. Read More...