Supply chain disruptions highlight need for better business continuity standards

07 December 2011

Posted by Michelle Devonshire

Organizations around the world may wish to enhance their business continuity standards in light of a new report showing high levels of supply chain disruption.

A total of 85 per cent of those responding to a survey by the Business Continuity Institute (BCI) stated their body had experienced at least one incident of this kind during 2011.

Supported by Zurich Financial Services, the study has highlighted the "deep-rooted sources of supply chain failure", with 40 per cent of those questioned claiming the problem was caused below the immediate supplier.

In its conclusions, the BCI suggested that "effectively managing supply chain continuity is critical" as disruptions can affect stakeholder confidence and the reputation of a company, as well as resulting in immediate costs, loss of productivity and loss of revenue.

A need for better risk management strategies was highlight by Lyndon Bird, BCI Technical Director, who said: "Business Continuity Management can help in gaining a better understanding of likely supply chain behaviour when faced by disruption and help build confidence in an effective response and continuity of supply."

The poll, which covered 62 nations worldwide, also found adverse weather was the leading cause of incidents, cited in 51 per cent of cases, followed by IT and telecoms outages (41 per cent) and cyber attacks.

A fifth (20 per cent) of the organizations surveyed were affected by the earthquakes and tsunami in Japan and New Zealand.

A new fund has been announced by the UK Government that is intended to strengthen supply chains within the advanced manufacturing sector.

Worth £125 million, the Advanced Manufacturing Supply Chain Initiative will start accepting applications from businesses in sectors such as aerospace, chemicals and automotive from early next year.

It was announced by Business Secretary Vince Cable and aims to ensure British supply chains meet world class standards, as well as attracting new investment in the country from global suppliers.

To read more about the report, click here.

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