Concentrated supply chain leaves buyers vulnerable

21 August 2013

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22 August 2013 | Adam Leach 

The majority of manufacturers in the automotive and technology sectors are reliant on the health of just four suppliers, according to a study.

An analysis of thousands of supplier sites across 50 countries by Resilinc found companies in these sectors have left themselves open to significant disruption because their supply chains rely heavily on Taiwan Semiconductor, Amkor Technology, ASE and United Microelectronics. 

Furthermore, the study found the facilities producing the components were located in areas at risk of natural disasters in Taiwan, China, Japan and the US.

Bindiya Vakil, CEO of Resilinc, said: “Sourcing, procurement and supply chain executives need greater visibility into their suppliers’ global footprint and site locations, sub-contractor and sub-tier supplier dependencies, site activities, parts origin, alternate sites, recovery times, emergency contacts and business continuity planning.” 

The study found that in a number of cases, the supplies were sourced by sub-contractors, resulting in buyers not being aware of the full scale of their reliance on the suppliers.

A recent study by MIT and PwC found that almost two thirds of businesses are not prioritising risk management, with just 40 per cent investing in advanced risk mitigation processes.

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