BCI Supply Chain Resilience Report Dominated by Covid-19 Disruption

Unsurprisingly, the Business Continuity Institute’s latest annual supply chain resilience report is dominated by issues arising from Covid-19.  After years where supply chain disruption was dominated by IT and information security incidents; neither of these even feature in the top 5 causes of disruption in 2020, which were:

  • Human illness
  • Loss of talent/skills (#4 in 2019)
  • Transport network disruption (#5 in 2019)
  • Adverse weather (#2 in 2019)
  • Health and safety incidents

Presumably though this is largely a temporary change rather than a permanent shift in the risk landscape.  Equally, it is not surprising to see increases in the incidence of reported supply chain disruptions:

  • 88% of organisations reported experiencing at least 1 disruption (up from 67% in 2019); and
  • 28% reported experiencing more than 10 disruptions (up from 6% in 2019).

The breakdown of where in the supply chain disruption originated is similar to previous years, with 56% overall originating with tier-1 suppliers.  However, in the specific case of Covid-19 disruptions the figure is only 46%; ie more than half of Covid-19 disruptions originated at tier-2 or below.

Aside from Covid-19 issues, there is cause for optimism in the finding that only 24% of respondents had not been able to recover any of the financial impact of their most significant supply chain disruption from insurance.  This is a big fall from last year’s figure of 43%, which itself came on the back of a sustained downward trend (down from 57% in 2016).  However, 2/3 of the organisations that were able to make insurance claims recovered less than half their losses; although some of this is related to specific Covid-19 exclusions.

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