Herndon, Va. – Over the past several years, executives across industries have seen the impact that supply chain disruptions – from natural disasters to port strikes – can cause so it’s not surprising that 35 percent of businesses in the manufacturing industry are extremely concerned about supply chain disruptions, according to new research from BSI.
However, the research also finds that 77 percent of manufacturers report increasing supply chain complexity as the fastest growing risk in business continuity, followed by malicious attacks via the Internet (68%) and increased regulatory scrutiny (58%).
While global sourcing across supply chains creates business continuity challenges for manufacturers, according to the research, suppliers operating in riskier countries have the fastest growing business continuity risk. The report also shows how manufacturing across different sectors can be disrupted by natural disasters, man-made disruption (conflicts) and a lack of resiliency in some countries to handle these events.
BSI also reports that the risk exposure varies by sector. The supply chains in two electronics sectors – automotive (53%) and aerospace (51%) – have a high risk of exposure to natural disasters, which also have a high proportion of manufacturing and raw materials sourcing in politically and geologically unstable regions, said BSI.
The key lesson for organizations is to plan for potential disruption, said BSI. An example cited is the three-month halt in production in the automotive sector due to a global reliance on a single source for a particular pigment used in metallic paint finishes during the 2011 Japanese tsunami.
"Recent global business continuity related incidents, such as the two days of strikes in Belgium that delayed 49,315 twenty-foot equivalent units (TEUs) of cargo at the port of Antwerp, and the droughts in Sao Paulo that forced companies to delay or halt production have been thrown into the spotlight,” said Shereen Abuzobaa, commercial director at BSI Supply Chain Solutions, in a statement.
