IDENTIFYING DISRUPTION

IN THE SUPPLY CHAIN

TOP 10 CAUSES AND IMPACTS OF SUPPLY CHAIN DISRUPTION
Relative proportion of survey respondents N/A Low impact Medium impact High impact

Unplanned IT or
telecommunications outage

Adverse weather

New laws or regulations

Loss of talent/skills

Outsourcer failure

Transport network
or disruption

Cyber attack
and data breach

Energy supply issue

Product quality incident

Business ethics incident

Source: Business Continuity Institute 2015

TOP 10 CONSEQUENCES OF
SUPPLY CHAIN DISRUPTION PREFERRED RISK MITIGATION STRATEGIES Preference on a scale of one to ten (ten being most preferred)

4 4.5 5 5.5 6 6.5 7 7.5

58%
40%
39%
38%
36%
29%
27%
23%
21%
14%

STRONG
SUPPLIERS

TIME
COMPRESSION

VISIBILITY

GLOBAL LOGISTICS
COMPETENCY

PREDICTIVE
MODELLING

AIR FREIGHT

ADDITIONAL
INVENTORY

IN-SOURCE OR
NEAR-SOURCE
Loss of productivity

Customer complaints

of working
Increased cost

Loss of revenue

outcome
Impaired service

shareholder concern
Stakeholder/

Damage to brand image

Product release delay

Delayed cash flows

regulationary scrutiny
Expected increase in

RESERVE
FUNDS

PURCHASE
INSURANCE

Source: UPS 2014

Source: Business Continuity Institute 2015

TOP 10 CHALLENGES FOR THE SUPPLY CHAIN MOST FEARED RISKS ORIGINS OF SUPPLY
Global survey of senior executives in manufacturing CHAIN DISRUPTION
Percentage of survey respondents

50%
Lack of information across the
extended supply chain 42%
Inadequate IT systems 38% 1 2 3
Immediate supplier
Excess inventory 35%
NATURAL CATASTROPHES

EMBARGOES AND WAR

POLITICAL CHANGE,

SPECIALISED SUPPLIERS
GLOBALISATION AFFECTING

Aligning operations to real-time

fluctuations in customer demand 35% 21%
Lack of skilled talent 30% Suppliers supplier

Lack of competitive
cost structure

Effectively supporting
27%
25%
8%
new product launches Much lower down the supply chain
Source: Allianz 2015
Ensuring sufficient supplier ca-
pacity to meet demand 19%
Supplier performance in terms of
risk, reliability and quality 14%
Responsiveness to changes
in demand or product mix 14%