Are supply chains still too fragile?

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Supply chain risk issues are still causing concern in the US IT industry, according to a new study by BDO, the accounting and consulting organisation. In fact, the concerns have increased in each of the past three years.

BDO found that 88 pert cent of technology companies cite concerns over reliable suppliers, vendors, distribution of products and services, as well as the global distribution chain.

And that figure, contained in The 2012 BDO Risk Factor Report for Technology Businesses, compares to 86 per cent last year and 75 per cent in 2010.

BDO reports a separate figure of 88 per cent of respondents who say that the impact of natural disasters and other geo-political issues poses a serious threat to supply chain management and operations – up from 81 per cent last year and a mere 55 per cent in 2010.

The rising levels of concern at these issues can be seen as a response to the dramatic natural disasters of last year – the Japanese earthquake and the floods in South East Asia.

These events have certainly highlighted the vulnerability of some supply chains – and the question has to be asked: have supply chains become too fragile?

In 2005, Cranfield’s Professor Martin Christopher and Helen Peck produced a paper, Building the resilient supply chain, which warned: “It has become apparent that many organisations have not fully recognised the nature of systemic supply chain risk and have continued to focus on seeking efficiency improvements through ‘lean’ solutions.”

It argued that a new priority had emerged for business planning – the search for supply chain strategies that embody a significantly higher degree of resilience.

Who, seven year on, would argue with that?

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