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.Read more at Poor Visibility Puts a Majority of Organizations at Risk for Supply Chain Disruption
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