Economic turmoil wreaks supply chain havoc

supply-chain-managementThe never ending economic crisis was to blame for more supply chain disruptions last year than insolvencies and horrible weather. According to a survey by Dynamic Markets, commissioned by Oracle, more than half of major companies in Europe, the Middle East and Africa (EMEA) suffered supply chain disruptions caused by economic woes.

The report surveyed 677 senior decision makers across nine EMEA regions and found that businesses took an average of 63 days to return to normal operations following a supply chain incident. The cost of an average incident in the UK was £275,000, well below the regional average of £450,000. However, the number of businesses affected by supply issues in the UK was 70 percent, higher than the EMEA average.

Over the past 12 months, 63 percent of EMEA businesses reported experiencing problems, but executives don’t appear overly concerned. Just a quarter of them said they carried out a full supply chain risk assessment, reports Supply Chain Standard. 58 percent of businesses had not performed a comprehensive risk assessment.

Most of the disruptions were caused by economic problems, at 24 percent, while adverse weather and supplier bankruptcy ranked second and third, at 19 and 16 percent respectively. The survey found that many executives were simply not getting timely information about potential supply problems from other departments and groups within their organisations. The study revealed that a poor internal communications infrastructure also contributed.

Dominic Regan, senior director, value chain execution at Oracle EMEA, said: “The survey paints a picture whereby a lack of communication and collaboration, when combined with poor risk assessments and inadequate compliance measures, is putting businesses at risk of significant operational disruption and financial loss.”

Although the problems were caused by unpredictable events beyond their control, it seems businesses could do a lot more to mitigate the effects of an interrupted supply chain.