Cottrill Research, LLC

BCI Supply Chain Resilience Report 2016: The Cost of Disruption

BCI Supply Chain Resilience Report 2016: The Cost of Disruption

The 8th annual Supply Chain Resilience Report, published by the Business Continuity Institute and supported by Zurich Insurance Group, tracks the origins, causes and consequences of supply chain disruption across industry sectors and regions worldwide. Highlight’s from this year’s report, directly quoted:

  • One in three organizations have experienced cumulative losses of over €1 million during the last year as a result of supply chain disruptions
  • Despite a decrease in the percentage of organizations that experienced at least one disruption (70% from 74%), those organizations suffered more of them, with the percentage of organizations that experienced at least eleven disruptions during the year increasing from 7% to 22%
  • The increased cost of disruption could be attributed to significant increases in the loss of productivity (68% up from 58% in 2015), cost of working (53% up from 39%) and damage to brand or reputation (38% up from 27%), all as a result of supply chain disruptions. 43% of organizations do not insure these losses meaning that they are bearing the full brunt of the cost themselves
  • 41% of disruptions occur with the immediate supplier, compared to 50% last year, however 40% of respondents report that they do not analyse the source of disruption
  • The percentage of organizations reporting losses in excess of €1 million from a single incident remains static at 9%
  • Unplanned IT and telecommunications outage remains the top cause of disruption with loss of talent/skills moving up to 2nd place from 6th in 2015. The remaining members of the top five causes of disruption were outsourcer failure, transport network disruption and cyber-attack/data breach
  • The top five consequences of disruption are loss of productivity, increased cost of working, customer complaints received, service outcome impaired and damage to reputation/brand
  • Only a little over a quarter of respondents (27%) report high top management commitment to supply chain resilience, a worrying decrease from 33% last year
  • Just under three quarters of respondents (73%) report having business continuity arrangements in place to deal with supply chain disruptions

You can get the report here.

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