6 in 10 businesses experienced at least one supply chain disruption in Asia Pacific in 2016

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:

  1. IT/Telecom outages was named as the number one cause of supply chain disruption
  2. One in four organisations experienced cumulative losses of over ‎US$1 million
  3. 46% of organisations do not insure their losses, meaning they bore the full brunt of the cost
  4. Only 30% of disruptions occur with an immediate supplier
  5. 48% responded that top management have made commitments to supply chain resilience

Read more 6 in 10 businesses experienced at least one supply chain disruption in Asia Pacific in 2016

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Managing the Risks of Multinational Supply Chains

Managing supply chain risks is critical to the success of any business.

Although, the importance of supply chain risk management is perhaps most clear in Asia Pacific with its high growth rate, shifting industry trends, increasingly sophisticated consumers and expanding businesses.

An Overview

With these marketplace dynamics comes greater interconnectivity of multinational risks. According to the World Trade Organisation (WTO), Asia Pacific includes nine of the world’s top 15 countries importing and exporting intermediate goods.

Companies in the region depend upon goods and services from companies in other countries in order to successfully operate their businesses, and vice versa. As the region becomes more interconnected and trade flows continue to increase, protecting valuable supply chains from both existing and new risks becomes critical to the success of companies based there.

However, managing these risks can be challenging. Today’s supply chains are becoming deeper and spread over more countries. Knowing exactly what, where and how connections can impact a company’s business can be difficult.

It is not uncommon for companies to have supply chains that go down several layers, beginning with one supplier or distributor which is dependent upon a second, which in turn depends upon a third and so on. A problem at any of these levels has the potential to disrupt a company’s business operations.

As a colleague of mine once explained: “You are only as good as your weakest link.” So it is important to have clear line of sight to all of the links in a company’s supply chain. Typically, issues such as quality control and incomplete or late delivery are top of mind when considering problems with the potential to disrupt a supply chain. There is another risk that is often underestimated, but can be equally as damaging – financial failure.

Read more at Managing the Risks of Multinational Supply Chains

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Many High-Tech Firms Adopt ‘Right-Shoring’ Supply-Chain Strategy, UPS Survey Finds

Many high-tech companies have adopted a “right-shoring” strategy for their manufacturing supply chains, an approach that balances factors such as cost, quality and transit time, according to UPS Inc.’s fifth-annual Change in the (Supply) Chain survey.

The survey, conducted for UPS by IDC Manufacturing Insights, polled 516 senior supply chain executives in the high-tech industry in North America, Europe, Asia, the Pacific and Latin America.

Offshoring of manufacturing and assembly operations to countries with low labor costs remains the most common strategy, but a growing number of tech firms said they are “near-shoring” — moving production closer to end markets — to improve service levels, reduce inventory in transit and gain more control over product quality.
Among the survey’s respondents, 45% said their companies use right-shoring strategies, 47% said they offshore and 35% said they near-shore. Near-shoring was up 25 percentage points from 2010.

“High-tech companies are building more flexibility into their shoring strategies and supply chains so they can respond better to demanding market dynamics,” said Dave Roegge, high-tech marketing director at UPS. “They’re thinking more holistically about their strategies to evaluate their transportation costs and the time it takes companies to deliver goods.”

Read more at Many High-Tech Firms Adopt ‘Right-Shoring’ Supply-Chain Strategy, UPS Survey Finds

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