Overseas supply chain risks cause concern

12 July 2009

13 July 2009 | Allie Anderson

UK buyers are acutely aware of the risks associated with international supply chains but many don't know what to do about it.

That was the conclusion of a survey conducted by global insurance broker and risk adviser, Marsh.

For example, of the 109 UK private and public sector organisations polled, 70 per cent believe there is a high level of risk associated with outsourcing or offshoring, but only half fully understand or manage these dangers.

And just 58 per cent were able to pinpoint particular areas of risk related to storage and logistics, despite overwhelming awareness (94 per cent) of the major role these factors play in supply chains.

The research also found more organisations are concerned about the threat of terrorist activity disrupting their international supply chains (65 per cent), than a major terrorist incident effecting UK operations over the next 18 months (56 per cent).

The lack of understanding of overseas risks means dangers are often easily under or overestimated, said Martin Caddick, leader of the business continuity management team at Marsh.

"The perception of overseas terrorism risk illustrates this point. By failing to fully understand their overseas risks, organisations are leaving themselves dangerously exposed to business interruption events," he said.


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