Supply Chain Risk Increased 36 Percent in 2018

A new report from Resilinc reveals that global risks have increased throughout 2018, with geopolitical conflicts posing some of the most potentially costly and disruptive supply chain impacts.

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A new report from Resilinc reveals that global risks have increased throughout 2018, with geopolitical conflicts, such as trade conflicts and Brexit, posing some of the most potentially costly and disruptive supply chain impacts. 

"Supply chain, sourcing and procurement professionals are on the front lines of managing global trade risks for their companies," says Bindiya Vakil, Resilinc CEO. "2018 challenged them in new ways, and 2019 is shaping up to present continued uncertainty as long-standing trade relationships are reconfigured."

With on going changes in trade relationships, organizations have to anticipate how it could affect their procurement strategies. A key strategy to manage situations is scenario planning and preparation, Vakil advises. 

In 2018, Resilinc EventWatch issued 2,629 event alerts, an increase of 36 percent year over year. According to Supply Chain Management Review, the firm classified 907 events as those impacting its customers' mapped supplier sites, requiring the company to do an impact assessment. Throughout the globe, the company event data showed that 21,152 supplier and 58,191 supplier sites producing 552,950 parts across multiple tiers in the supply chain were potentially affected last year. 

The report points to potential vulnerabilities in a significant percentage of global supply chains. Supply Chain Management Review reports that data showed that 66 percent of the sites flagged as potentially impacted by a supply chain event were manufacturers, with only 12 percent identifying an alternative manufacturing site to meet customer needs in the event of primary manufacturing disruption. 

“With the global supply chain so fraught with uncertainty and instability, supply chain professionals should be examining where sole-source manufacturing suppliers make their supply chains vulnerable and how they can work with suppliers to identify and qualify alternate manufacturing sites,” Vakil tells Supply Chain Management Review. “This is just one example of the opportunities to reduce risks of disruption and improve the overall resiliency of the supply chain systems that are at the heart of companies’ performance and profitability.” 

The report also detailed how there was a 640 percent increase year-on-year in regulator change events and a 370 percent increase in protest/riot events. The dramatic growth of these events signals to growing political turmoil. 

Still, it will take time for supply chain managers to reach maturity models. However, it is important that when faced with risk they do not wait to remedy the situation. 


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