The Business Continuity Institute Supply Chain Resilience 2014 report was released earlier this week. Rather unsurprisingly, given the CMI survey results over the past 5 years, the main two causes of disruption were IT/telephony and extreme weather.
The report highlights a ‘worrying finding’ in the low management commitment to this issue. However, given that almost half of the single most significant incidents had a cost of less than €50k, this may go some way to explaining why supply chain issues do not warrant greater concern; it may be more useful for the report to categorise the impact in terms of percentage impact on revenues or company value.
Similarly, the report also finds it ‘worrying’ that supply chain losses are not insured; it is possible that the increase in administration, calculation and premiums simply make this an unnecessary overhead, with businesses willing to bear the risk of minor losses.
Having said this, the report does highlight some significant losses that have been experienced by businesses, and demonstrates a wide variety of reasons, including customs delays, extreme weather, earthquakes and conflict. This does demonstrate the need to understand the complexity of the supply chain and the potential areas of vulnerability, particularly for critical supplies. It is also worth noting that simply requesting certification to ISO 22301 will not provide adequate assurance that the business continuity arrangements are fit-for-your-purpose.
ISO 22301 requires that businesses understand the requirements of their interested parties, which entails a more proactive understanding of the needs of customers. It will be interesting to see if this does cascade into the supply chain, with both Tier 1 and Tier 2 providers making more endeavours to understand and satisfy the requirements of their clients.
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Written by Helen Molyneux