Global Supply Chains not ready for challenging times

Companies fear major disruptions in their ability to source, produce and ship goods around the world. Survey Shows Businesses Ignore Risks, Raise Vulnerabilities

Nearly half of companies with global supply chains say they fear major disruptions in their ability to source, produce and ship goods around the world. And they’re not doing much to prevent it.

In a new survey sponsored by UPS, 47 percent of companies say they need to pay more attention to risk mitigation compared to just 16 percent that believe they pay an adequate amount of attention. As a result, only 38 percent of those surveyed rate the resilience of their supply chain above average, while a troubling 42 percent say the expansion of their global supply chains has outpaced their ability to manage risk.

The global survey of nearly 350 senior executives was released today by UPS and the Economist Intelligence Unit. The survey itself was supplemented with interviews of academic experts and leading supply chain practitioners.

The survey pointed out some troubling findings, reinforcing the point that rising risks to supply chain resilience are too often ignored in the rush of day-to-day business – and companies know it.

Low-cost country sourcing, which has grown significantly in recent years, brings its own set of challenges to global supply chains. Almost half of all survey respondents said low-cost sourcing had posed significant problems, such as the quality received from such suppliers and even their ability to deliver goods as promised. Although most companies intend to increase their low-cost sourcing, 10 percent of those surveyed intend to reduce it.