Supply chain disruptions rise

The number of businesses experiencing ten or more supply chain disruptions rose in from 4.8 per cent to 27.8 per cent during 2020, according to a report by BCI.

BCI’s Supply chain resilience report 2021 found that most organisations suffered delays in transportation. That affected cross-border land transportation the most 84 per cent, but domestic land (70 per cent) shipping (65 per cent) and air (63 per cent) all suffered disruption.

Head winds

“At the start of the pandemic, air freight providers repurposed passenger planes to make up for the lack of belly cargo availability, land transport had its own challenges with goods being held up at borders and sea freight is now struggling with global container shortages,” the report said. “With global vaccine transportation dubbed the biggest logistics project since World War II, the logistic headwinds are likely to continue into 2021 and beyond.”

Organisations had already started to check the resilience of key suppliers before COVID-19. This trend accelerated over the past year. Due diligence has also improved.

“Most organisations are now going beyond a ‘tick box’ exercise when carrying out their due diligence processes,” the report found. “More than half now request full details of business continuity programmes rather than merely asking if a plan is in place

Commitment

Almost half of survey respondents (49 per cent) said top management are more committed to supply chain risk, with a further 27 per cent reporting they were “somewhat” keener.

The report also says how far businesses have improved their use of technology in areas such as supply chain mapping. This has been driven by supply chain shocks following health lockdowns during the pandemic. One respondent reported that it had to close for six weeks while it sourced alternative sources of semi-conductors.

The Summer 2021 issue of Enterprise Risk will feature a special issue on supply chain risk. Find out about IRM’s Supply Chain Risk Management Certificate here.

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