One in four businesses exceed US$1 million in losses, but almost half of survey respondents in Asia Pacific did not insure their losses.
Zurich Insurance has revealed the key Asia Pacific findings of the Business Continuity Institute (BCI) “Supply Chain Resilience Report 2016”. Despite six out of ten organisations experiencing at least one supply chain disruption during the past year, with one in four exceeding US$1 million in losses, the report found that almost half of survey respondents in Asia Pacific did not insure their losses.
Partnering with BCI for the eighth year, the annual report is regarded as one of the most authoritative benchmark reports in this business area. The key findings for Asia Pacific (APAC) this year are:
IT/Telecom outages was named as the number one cause of supply chain disruption
One in four organisations experienced cumulative losses of over US$1 million
46% of organisations do not insure their losses, meaning they bore the full brunt of the cost
Only 30% of disruptions occur with an immediate supplier
48% responded that top management have made commitments to supply chain resilience
The majority of companies that experienced a supply chain disruption in the last year cited either a tier 1 or tier 2 supplier as the predominant source of the disruption, according to 2015 Supply Chain Resilience Report from the Business Continuity Institute and Zurich Insurance. Half of all respondents in the report cited a tier 1 supplier, the immediate or direct supplier, as the major source of the supply chain disruption and an additional 21% cited their tier 2 supplier, the supplier of the OEM’s tier 1 supplier.
The report also showed the majority (72%) of organizations lack full visibility into their supply chains. What is troublesome, too, is that nearly 1 in 10 (9%) of the more than 500 companies surveyed for the report do not fully know who their key suppliers are. This can no doubt make supply chain risk management even more difficult for firms that lack proper oversight on who exactly their suppliers are.
According to Thomas Kase, vice president of research at Spend Matters and an expert on supply chain risk, sometimes companies lack quality visibility and have a fragmented picture of their suppliers and what they deliver.
“The end result is a foggy mess,” Thomas said.