Trade wars disrupt the supply chain, said the report, such as the trade conflict between the US and China © Joe Raedle/Getty Images
Trade wars disrupt the supply chain, said the report, such as the trade conflict between the US and China © Joe Raedle/Getty Images

Supply chains face the 'disruption era'

21 June 2019

Supply chains are facing an era of disruption with increased risk from Brexit and fragile supply networks, according to a survey.

A report by data and planning consultancy Vuealta called Future of the Supply Chain said almost 90% of UK and US business respondents had experienced supply chain disruptions in the last five years.

For UK firms Brexit uncertainty caused more disruption than natural disasters and cyber attacks combined.

Vuealta described the current business climate as the “disruption era” due to constant prevalent issues such as trade wars, political and economic instability, cyber security threats, and natural disasters. 

Brexit was responsible for disruptions at 50% of UK businesses, with 18% of US counterparts also experiencing disturbances. UK and US companies were also impacted by supplier failure (28%), natural disasters (27%), cyber attacks (23%), political regime changes (22%) and international trade wars (22%).

Ian Stone, CEO at Vuealta, said: “UK businesses want to grow, yet they’re at risk of seeing critical supply chains and logistics disrupted by events outside of their control. They know they can’t control the weather for example, or what may or may not happen over Brexit, so it’s clear they need to focus on what they can manage. That means planning for all eventualities and being able to respond in real time.

“This requires a connected supply chain ecosystem with transparency and collaboration between partners. Those that achieve this will create sustainable and significant competitive advantage and will lead the race in the search of new markets and profit streams,” he added.

The report found that most businesses that experienced cyber attacks were turning to technological solutions in order to mitigate against future threats. Almost half of the respondents highlighted the importance of access to real-time information across the supply network.

Transparency of data was shown to help alert suppliers and contribute to improved efficiency and profits. “Knowing there is a supplier facing challenges in one part of the globe allows businesses to react accordingly, whether it’s updating customers with information or deploying alternatives to counter the potential impact,” said Veualta.

Over a third of companies previously vulnerable to natural disasters were interested in diversifying their supply network by using multiple supply options and alternative suppliers. Investing in technology, planning ahead through stress testing and scenario planning, and increases in local inventory were also popular solutions.

Business leadership was also revealed to be an area that needed to be improved as respondents admitted that leadership teams didn't understand the potential impact that a natural disaster or cyber attack could have on the supply chain.

Vuealta placed emphasis on “revolutionising the planning process, managing more complex networks with additional suppliers and doing so with more agility and foresight”.

Overall, accurate data, detailed planning and transparency were seen as critical to mitigating risks from external factors, said the report.

The report was based on a survey of 1,002 business decision makers in the US and UK working in companies with over 250 employees.

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