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Free Articles From The Current Issue
Who keeps the engines of global commerce running?Although what supply chain professionals do every day impacts commerce everywhere in the world, their role in corporate success and competitiveness generally has remained in the background.
Emerging consumer markets: the new drivers of global economic growth
Consumption is still largely concentrated in North America and Western Europe, but consumers in emerging markets are stepping onto the world stage in greater numbers.
Global trade trends down as local consumption slowly grows
Global trade levels declined by 1.3 percent in Quarter 3 of 2011 while domestic consumption continued to grow.
Time to come home?
To offshore, nearshore, or "reshore"? A total cost of ownership (TCO) analysis can answer that question. For some companies, TCO analyses are suggesting that manufacturing close to the point of consumption is the best choice.
A hard look at the soft side of performance
Supply chain scorecards typically focus on operational metrics. But if companies want to capture a true picture of supply chain success, they need to measure employees' interpersonal performance, too.
Most Read Articles
Weather is the leading culprit for supply chain disruptions
Having a supply chain disruption? More than likely, the blame can be assigned to adverse weather events, such as a tornado, flood, or windstorm, according to the results of a new survey of supply chain organizations worldwide.
A survey conducted by the Zurich Financial Services Group and the UK-based Business Continuity Institute found that the most common reason for a supply chain disruption in 2011 was bad weather, cited by 51 percent of respondents. The two groups canvassed 559 companies from 14 different industries and 62 countries.
The survey found that 85 percent of respondents had suffered at least one supply chain break in 2011. Unplanned telecommunications and information technology outages were the second most-common reason for a disruption, cited by 41 percent of survey takers. There was a tie for third, with 21 percent listing transport-network disruption and an equal percentage citing an earthquake and/or tsunami. Most of those (20 percent) were affected by the March 11 earthquake and tsunami in Japan.
The consequences of a supply chain break can be severe for an organization, the survey results suggested. When asked what impact such a disruption could have on affected companies, 49 percent of respondents said that it can result in a loss of productivity, and another 38 percent said it could increase operating costs. Thirty-two percent said disruptions cause a loss in revenue—so much so, in fact, that 17 percent of the respondents said the financial costs of the largest single supply chain incident they experienced this past year amounted to 1 million euros or more.
Finally, the survey also found that most organizations are not prepared to handle a severe disruption. Only 8 percent of the respondents were confident that their suppliers had a business continuity program in place to respond specifically to supply chain ruptures.
| Top five causes of supply chain disruptions | |
| Adverse weather | 51 percent |
| Information technology or telecommunications outage | 41 percent |
| Transport network disruption | 21 percent |
| Earthquake or tsunami | 21 percent |
| Failure by outsourced service provider | 15 percent |
| Loss of talent/skills | 13 percent |
| Source: "Supply Chain Resilience 2011 Study," Zurich Financial Services Group and Business Continuity Institute | |
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