Supply chain disruptions are ‘common but not excessively frequent’, according to the 14th edition of the Business Continuity Institute (BCI) Supply Chain Resilience report, sponsored by Zurich Resilience Solutions, the risk advisory arm of the insurance group.
After management interest in supply chains reached an all-time high during the covid pandemic, challenges in 2024 to supply chains include the Houthi attacks on maritime traffic in the Red Sea, the drying up of the Panama Canal, trade wars erupting between nations, and civil unrest leading to strikes. In a foreword, Rachael Elliott of the BCI noted that the most popular reason for supply chain disruption this year as cited by respondents to a BCI survey was ‘third-party failure’, with 43.6 per cent labelling this as their top cause for disruption; next came cyber, and the weather or natural disasters. She commented: “With improved due diligence processes in place, one would expect disruptions from third party failures to be falling, rather than increasing. All this highlights just how important it is to regularly review the effectiveness of supply chain management.”
As for where the disruptions by others occur, the source of disruption for most was in the first two tiers of the chain, and above all the first. The report said: “Organizations are increasingly focusing on examining their entire supply chains to better understand the origins of disruptions and implement preventive measures. This leads to identification of more supply chain incidents throughout the tiers.”
Over the past decade, there has been a shift from reporting within specific functions to firm-wide reporting, according to the study; and ‘analysing deeper than ever the tiers of critical suppliers’. Those surveyed are tending to asking for a business continuity plan from their suppliers, to further their understanding of risks. As for tech to analyse disruptions, Excel spreadsheets still remain the most popular tool. Measuring the financial impact of supply chain disruptions is now practised by most, though far from all, reflecting a heightened awareness of the economic consequences of incidents, according to the document. Insurance uptake has risen notably in 2024, and almost half of organizations now hold some insurance for major incidents. That said, those surveyed perceived a decline in top management commitment to managing supply chain risk.
Cyber
As for cyber, the report says that “volume and efficacy of attempted cyberattacks are on the rise, with respondents reporting a significant increase in cyber-attack attempts over the past year. Phishing, especially credential harvesting, remains prevalent due to widespread digitalisation. Additionally, the availability of AI tools has enhanced the sophistication of these attacks, enabling non-technical criminals to create complex attack strategies. As supply chains become increasingly digitalised, the potential impact of cyber threats grows.”
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Peter Ralph, Head of security and resilience EMEA for Rolls Royce, and Pat Grainey, Director of Global Supply Chain Risk and Resiliency at Vertiv, were among speakers at a webinar to launch the EMEA copy of the report. For this and other reports from the BCI, you can sign up via the Institute’s website; you don’t have to pay or be a member. Visit https://www.thebci.org/.
