At 85.6 per cent, the proportion of supply chains exposed to elevated, high or severe risk of natural disaster is highest for the apparel sector, as it has a high proportion of manufacturing and raw material sourcing based in politically and geologically unstable regions, according to research released by BSI, the business standards company and the Business Continuity Institute (BCI).
In its report, BSI says a third (35 per cent) of businesses in the manufacturing industry are extremely concerned about potential supply chain disruption.
More than three quarters of manufacturing firms (77 per cent) report increasing supply chain complexity as the fastest growing risk in business continuity, with malicious attacks via the Internet (68 per cent) and increased regulatory scrutiny (58 per cent) taking second and third places, the research concludes.
The research shows that suppliers operating in riskier countries are the fastest growing business continuity risk. However, risk exposure varies by sector. The apparel sector (85.6 per cent) leads the sectors with the proportion of supply chains exposed to elevated, high or severe risk of natural disaster, followed by automotive (53 per cent) and aerospace (51 per cent) sectors.
Shereen Abuzobaa, commercial director at BSI Supply Chain Solutions said: “Our data shows an alarming percentage of suppliers in a variety of the industries are based in areas with significant risk of natural disaster or man-made disruption such as these.”
“Our experience shows that while companies are aware of and test for internal risks, they are failing to map or assess risk effectively across their supply chain. More often than not, only the first tier of suppliers is considered with no thought given to those further down the supply chain. Testing and assessing every supplier across every tier is prohibitively time consuming for businesses. By concentrating on higher risk suppliers, companies can be more effective and confident in mitigating risks,” Abuzobaa adds.
For business continuity planning, BSI offers ten tips: identify critical business functions, remember the seven ‘P’s (providers, performance, processes, people, premises, profile (your brand) and preparation), understand and track past incidents with suppliers, assess and understand vulnerabilities and weak points, agree and document your plans, make sure plans are communicated to key staff and suppliers, try your plans out in mock scenarios, expect the unexpected, make sure your continuity plans are nimble and can evolve quickly, and make sure you are not just ‘box-ticking’.
BSI Supply Chain Solutions is the leading global provider of supply chain intelligence, auditing services, audit compliance and risk management software solutions, and advisory services.
