Resilinc unveils new data highlighting the primary drivers of supply chain disruptions during the first half of 2024. From January through June, Resilinc's EventWatchAI platform reported a total of 10,629 supply chain disruptions, with the Life Sciences, Healthcare, General Manufacturing, High-Tech and Automotive industries bearing the brunt of the impact. Notably, the overall number of disruptions grew 30% over H1 of last year.
While the number of disruptions notably decreased in some historically high-risk areas like factory fires (down 21%), emerging compliance and ESG risk areas experienced substantial year-over-year increases. Regulatory Changes jumped an astounding 185%, Fines increased 82%, Legal Action grew 43%, and Labor Violations shot up 144%. Many of these increases can be attributed to 2024 ESG legislation like the German Supply Chain Due Diligence Act, Canada's Modern Slavery Act, EU Corporate Sustainability Reporting Directive, EU Deforestation Regulation and new PFAS regulations.
Key Takeaways:
- While Business Sales and Profit Warnings saw only a modest increase, other financial and organizational risk areas experienced notable year-over-year escalations. Bankruptcies surged 200%, Force Majeures increased 128% and Leadership Transitions went up by 92%. Economic pressures like high-interest rates and inflation, shifting consumer demand, increased operating costs, and supply chain disruptions are all likely factors.
- Labor disruptions continue to climb for the second year in a row, up 42%. Protests/Riots jumped a dramatic 421% in the first half of this year. While strikes and protests in the U.S. were not as prevalent as last year, the labor unrest seen in countries like France, the Philippines, South Korea and Indonesia reflects discontent over economic conditions, labor rights, and government policies.
- Extreme weather events continue to grow in frequency and severity with the number of notifications jumping nearly 130% over H1 of last year. Specific weather event types like Flooding increased by 220%, Forest Fires increased by 48%, and Tornadoes jumped 94%. As hurricane season continues, Resilinc has already recorded the highest number of notifications for Hurricanes/Typhoons (63 alerts) in H1 of this year—marking a 37% increase over last year and a staggering 425% jump from H1 2019.
- Of these reported disruptions, over half (58%) were impactful enough to trigger the creation of a WarRoom. These virtual platforms are created in the Resilinc dashboard when events have a high potential to disrupt customers’ supply chain operations. From these WarRooms, customers and their suppliers communicate and collaborate to swiftly assess and mitigate disruptions.
