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Supply Chains Disruptions at Highest Rate in 3 Years

Nov. 27, 2018
Factory fires were the most frequent event type in the first half of 2018.

Supply chain disruptions continue to grow at an alarming rate, according to a new study,  2018 EventWatch Supply Chain Disruption Report, by  Resilinc.

In the first half of 2018, Resilinc notified a record 1,069 events within a six month period, the highest since Resilinc began monitoring in 2010. Of those events, more than 300 of them directly impacted the continuity of supply.

 Among these, natural disasters and weather-related events continued to be a major source of disruption across the globe and especially in the United States, continuing a trend started in 2017.

In addition to natural disasters, factory fires continued to be a significant threat to supply chains. 

Over 700 events indirectly impacted supply chains including tariffs, mergers and acquisitions, force majeures, price fluctuations, and cyber-attacks just to name a few.  Factory fires were the most frequent event type in the first half of 2018. 

“Global business leaders need to understand that their supply chains are vulnerable”, states Bindiya Vakil, CEO of Resilinc. “2018 has been a difficult year for global companies due to ongoing operational challenges that have curtailed growth plans and negatively impacted margins. Our data shows that impactful events happen one-third of the time, nearly every day, which should make CEOs and Board of Directors take the risk seriously.”

Advanced technologies such as AI and machine learning (ML) for improved disruption detection on the scale required in today’s complex and global economy.  Approximately 18 million news stories were analyzed during the first 6 months of 2018, way more than could be reviewed previously using manual means. “Our ability to detect and notify clients of potential problems deep in the global multi-tier supply chain is an order of magnitude greater than previous years” said Shahzaib Khan, Director of EventWatch at Resilinc. “Anyone attempting to monitor without AI or ML simply will not be able to keep up with all the news flying at them,” explains Khan.

Resilinc strongly encourages leaders to 1) invest in supply chain mapping and disruption monitoring, and 2) work with suppliers to ensure they are similarly prepared and proactively mitigating the biggest risks. 

 Key report highlights include:

  • Supply chain impact events occurred at a record rate in the first half of 2018, reaching 29%, as compared to 25% in 2017 and 19% in 2016.  In addition, this rate was over 30% in four out of six months in 2018, which has historically never been seen.
  • Factory fire/explosion represented the majority of EventWatch bulletins with 15.25% of bulletins notified.
  • North America continued as the leading impacted geography, receiving a total of 457 events with 301 being potentially impactful.
  • Extreme weather was the single most impactful event type, occurring 41 times.
  • Tariff impacts were reported 26 times, representing the most in any previous 6-month period. 
  • The automotive industry was particularly susceptible to factory fires, with more than 134 reports of factory fires across suppliers in this industry.