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4 November 2011 |
More than a third
of supply chain disruptions are the result of problems with indirect suppliers,
research has found.
A global survey,
conducted by the Business Continuity Institute (BCI) and published this week, found 85
per cent of companies suffered at least one disruption in their supply chain.
The report, which quizzed 559 companies from 62 countries, indicated a growing
need for procurement departments to increase focus on sub-contractors to main
suppliers with 40 per cent of all disruptions resulting from issues below
CIPS CEO David
Noble said: “Disruptions to supply chains are becoming virtually commonplace
and as the report shows, a high proportion of disruptions happen further down
the supply chain in places many companies don’t look, such as second or third
He added that as a
result of a lack of focus further down the supply chain “it often comes as a
surprise when trouble hits”.
global supply chain product manager at Zurich Insurance,
who appeared at the CPO Agenda debate on risk management,
said the finding “reinforced” the need to improve risk management throughout
the entire supply chain.
The survey also
found supply chain problems had far-reaching consequences. A total of 19 per
cent of respondents reported that disruptions had resulted in concern from
shareholders. Reputational damage (17 per cent) and an increase in regulatory
scrutiny (11 per cent) were also cited as longer-term consequences.
technical director at the BCI, said: “It is more critical than ever to strike a
sensible balance between the need to drive down costs and the need for these
cost savings not to be wiped out through disruption or unacceptable risk
conditions were the most common cause of disruption with 51 per cent naming it
and 41 per cent reporting IT and telecom outages as a cause. Cyber attacks
became the third most common issue for the first time in the three years the
report has been carried out.