On May 1 2019, the Business Continuity Institute published a new document, a trend analysis on the status of supply chain resilience across different sectors over the course of the past 10 years.
The report highlighted very relevant insights about the state of the industry.
First, the percentage of organizations facing supply chain disruptions is shrinking: from 72.3% to 56.5%. Despite the rising of cyber-attacks, data breach and loss of talent / skills, organizations seem to be coping much better with their supply chain resilience and continuity.
This may be because more and more organizations are using industry standards (ISO 22301) to check business continuity arrangements of suppliers. This has raised from 36.5% in 2012 to 51% in 2018.
However, there is still a lot of work to do in this direction. Only 10.4% of organizations claim they were asked to provide assurance of their business continuity management in every tender. This number grows to 47.5% if summed with organizations that were asked to ‘in majority of tenders’ or ‘sometimes’.
On a similar note, 34.1% of respondents of the survey claim that business continuity features as part of their supplier contractual discussions from the start. 27.8% claim this happens only when the contract risk is high, while another 16.7% say business continuity features as part of the discussion but only once purchase decision has already been made.
In order to increase these numbers, top management commitment is a fundamental achievement. Unfortunately, in 10 years there was little or no progress in this sense. Organizations report similar level of commitment from their top management.
This is difficult to explain as supply chain disruptions can cause various and severe damage to any organization. The most common include loss of productivity (57.8%), increased cost of working (41.6%), impaired service outcome (35.9%), customer complaints (33.7%), loss of revenue (30.08%), damage to brand reputation (23.8%). Economic consequences can reach up to €10 million in 13.7% of the cases.