CSCMP's Supply Chain Quarterly
May 22, 2019
Forward Thinking

Supply chain disruptions hit record high

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Disruptive events accelerate in first half of 2018, with North America leading the way as most-affected region, company report shows.

Supply chain disruptions continue to grow, hitting a record number of events in the first six months of 2018, according to a new study from supply chain risk management firm Resilinc.

The company released its first half 2018 EventWatch Supply Chain Disruption Report in late November, noting a record 1,069 disruptive events within a six month period, the highest since the company began monitoring such events in 2010. Of those, more than 300 events—including natural disasters, weather-related incidents and factory fires—directly affected continuity of supply, the company said. More than 700 events indirectly affected supply chains, including tariffs, mergers and acquisitions, price fluctuations and cyber attacks, the company said.

The company concluded that the events caused the highest potential for financial or revenue impact in three years.

Resilinc monitors supply chain disruptions with its artificial intelligence (AI) powered monitoring service, which analyzes millions of news stories per month across 53 languages, watches the Internet 24 hours a day, and notifies users about developments that can disrupt supply chains, according to the company. Resilinc monitors the high tech, automotive, pharmaceutical, medical devices, healthcare, aerospace and defense, food and beverage, and consumer packaged goods industries.

The company said natural disasters and weather-related events continued to be a major source of disruption around the world in the first half of 2018, especially in the United States, continuing a trend started in 2017. The company added that North America continues to be the region most affected by supply chain disruptions.

"Global business leaders need to understand that their supply chains are vulnerable," Resilinc CEO Bindiya Vakil said in a statement announcing the study's findings. "2018 has been a difficult year for global companies due to ongoing operational challenges that have curtailed growth plans and negatively impacted margins. Our data shows that impactful events happen one-third of the time, nearly every day, which should make CEOs and [boards of directors] take the risk seriously."

To address growing supply chain risk, Resilinc said business leaders should invest in supply chain mapping and disruption monitoring, and work with their suppliers to ensure they are similarly prepared and proactively mitigating the biggest risks.

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