The annual Risk Report from supply chain risk management platform Resilience360 by DHL summarizes the significant supply chain challenges of the last 12 months and analyzes their impact. Over the past year, Resilience360 analytics identified thousands of major events that resulted in significant supply chain disruptions. These included industrial fires and explosions, industrial action, civil unrest and protests, port disruptions, cargo and border delays, trade disputes, production halts, and natural disasters.
In addition, the annual Risk Report predicts the Top 10 supply chain risks for 2020: a summary of threats that deserve particular attention throughout 2020 and beyond.
Eight of the ten predictions from the 2019 Resilience360 Risk Report created significant disruptions to supply chains over the last 12 months.
“2019 proved once again that the supply chain risk environment is continually changing and evolving. Last year, companies were challenged by a dramatic escalation in trade tensions and by sophisticated and large-scale cyberattacks,” said Tobias Larsson, chief executive officer, Resilience360. “At the same time, production and logistics operations had to cope with a broad range of disruptive events, including natural disasters, industrial fires and explosions, production restrictions, labor disputes, port disruptions, and cargo and warehouse theft.”
Larsson continued, “The recent coronavirus outbreak has demonstrated that disruptive events can impact demand as well as supply. It has also highlighted the divide between companies that are able to dynamically visualize and monitor supply chain risks and those that are unable to. The financial and reputational cost of not being able to predict and respond to supply chain risk is more apparent than ever.”
Some insights from the Resilience360 Risk Report:
- Resilience360 reported a large number of high impact incidents that had a significant operational impact for supply chains, with industrial fires (27.2 percent), earthquakes (22.7 percent), and cargo & warehouse theft (18.3 percent) featuring most prominently.
- Weather was a contributing factor to ground transportation disruptions across North America. In March, a series of weather events triggered extreme flooding in eastern Nebraska, western Iowa, northeast Kansas, and northwest Missouri, and caused extensive transportation disruptions for rail-dependent and single-road-dependent local producers in industries such as ethanol, medical devices, and agricultural equipment.
- In EMEA the UK had the most incidents, followed by Germany and France, which are the largest economies in the region. Together, these countries accounted for almost half (49%) of all incidents reported in Europe and included cargo thefts, fires, and ground transportation disruptions. Following the top three countries are the Netherlands, Russia, Italy, and Spain, all of which have significant supply chain relevance.
- In LATAM, 2019 supply chain disruptions were highest in October (8.79 percent) and July (8.78 percent), making up over 17 percent of total annual incidents reported by Resilience360 throughout the year. For the region, earthquakes and cargo and warehouse theft featured as the top two high impact incident categories.
- In the Asia Pacific region, earthquakes account for 37% – the highest – of all high impact events that were covered. Eight out of ten major earthquakes in 2019 with the highest number of casualties were from Indonesia, Pakistan, the Philippines, and China. The figure also accounts for earthquakes with lower magnitudes from countries like Japan and New Zealand. Subsequent disruptions caused by earthquakes – such as structural collapse, roadway disruption due to debris, and power outages – also affected manufacturing and logistics operations.