UK organisation, the Business Continuity Institute (BCI), says nearly a quarter of companies responding to its recent supply chain survey had suffered losses of at least €1 million during the previous twelve months as a result of supply chain disruptions. Of these, 13.2% suffered a one-off disruption that cost in excess of €1 million. Further, some 40% of organisations polled were not insured against any of these losses.

While the survey results indicate a growing awareness of business continuity management and its role in ensuring supply chain resilience, many organisations have yet to improve on their reporting and business continuity arrangements.

Lyndon Bird FBCI, technical director at the BCI, commented: “Should we be alarmed by some of the figures revealed in this survey? Perhaps so. Should we be surprised by them? Probably not. As long as organisations are failing to put business continuity mechanisms in place, and as long as top management is failing to give the issue the level of commitment it requires, supply chain disruptions will continue to occur and they will continue to cost the organisation dearly. In our globally connected world, these supply chains are becoming ever more complex and more action is needed to make sure that an incident in one organisation doesn’t become a crisis for another.”

Report highlights:

-78.6% of respondents do not have full visibility of their supply chains. Only 26.5% of organisations coordinate and report supply chain disruption enterprise-wide. 44.4% of disruptions originate below the Tier 1 supplier and 13% of organisations do not analyse their supply chains to identify the source of the disruption.

-The primary sources of disruption to supply chains in the last 12 months were unplanned IT and telecommunications outage (52.9%), adverse weather (51.6%) and outsourcer service failure (35.8%).

-The loss of productivity (58.5%) remains as the top consequence of supply chain disruptions for the sixth year running. Increased cost of working (47.5%) and loss of revenue (44.7%) are also more commonly reported this year and round out the top three

-Respondents reporting low top management commitment to this issue have risen from 21.1% to 28.6%. This is a worrying finding as low commitment is likely to coincide with limited investment in this key performance area.

-The percentage of firms having business continuity arrangements in place against supply chain disruption has risen from 57.7% to 72.0%. However, segmenting the data reveals that small and medium sized enterprises (SMEs) are less likely to have business continuity arrangements (63.9%) than large businesses (76.2%).

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