Supply chain disruption causes increased losses

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A third of organisations have experienced increasing losses of more than €1m in the last year due to supply chain disruptions, a report by the Business Continuity Institute (BCI) has found.

Although the research demonstrates a decrease on the percentage of organisations that experienced at least one disruption (74 per cent to 70 per cent), those that experienced at least 11 disruptions over the course of the year increased from 7 per cent to 22 per cent.

The BCI suggested that the increasing cost of disruption could be due to a number of factors, including: increases in the loss of productivity (68 per cent up from 58 per cent in 2015), cost of working (53 per cent up from 39 per cent) and damage to brand or reputation (38 per cent up from 27 per cent.)

The institute said that one of the potential reasons behind the rising number of disruptions, is that fewer organisations are ‘maintaining adequate visibility over their supply chain’ – those that do have adequate visibility has dropped from 72 per cent (2015) to 66 per cent this year.

“Our study reinforces observations about the growing cost of supply chain disruptions and its negative impact on an organisation’s reputation,” said Patrick Alcantara DBCI, senior research associate at the BCI and author of the report. “More than ever, it is important to focus on supply chains, identify areas of risk, and deploy appropriate arrangements which increase resilience.

“Business continuity has an essential role to play in this. “Our research abundantly shows how business continuity professionals, working with their supply chain counterparts, can build supply chain resilience and direct management efforts in this area.”

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