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BCI Supply Chain Resilience Report 2018 Released

It’s that time of year again: bonfire night and the BCI Supply Chain Resilience Report!  The survey has now been going for ten years, and the 2018 report very much confirms the patterns seen in previous years:

  • 56% of respondent organisations experienced one or more supply chain disruptions in the last 12 months (down slightly from 65% in 2017);
  • Financial losses were broadly similar to last year (although there weren’t nearly as many very high impact events (losses greater than €100m) as were reported last year);
  • 47% of respondents had no insurance cover for these losses (compared to 51% in 2017).

It is also interesting to look at where in the supply chain the disruption occurred.  The 2018 figures were broadly similar to previous years with:

  • 52% of disruptions occurring amongst tier 1 suppliers;
  • 23% occurring amongst tier 2 suppliers; and
  • 11% occurring at tier 3 and beyond.

These figures really speak to the difficulty of managing supply chain risk effectively in modern business: getting visibility of the riskiness of even tier 2 suppliers is a significant challenge, let alone tier 3 and beyond.  The implementation of just-in-time methods has certainly enabled firms to reduce inventory; but some interesting academic research finds that much of the capital freed up has not been reinvested in new opportunities, but is actually held in cash primarily to mitigate the risk of supply chain disruptions!

On a more practical level, we are happy to advise on ways that you can assess and manage your supply chain risk.