December 2018 | News | Global Logistics

Weather Forecast: Supply Chain Disruptions Ahead

Tags: Global Economy, Global Logistics, Global Trade Management

Mergers and acquisitions, weather crises and factory fires were among the main causes of global supply chain disruption in the first half of 2018, according to Resilinc data.

Global supply chain disruptions continue to grow at an alarming rate and the potential for financial or revenue impacts is the highest it has been in three years, finds Resilinc's recent EventWatch Supply Chain Disruption report.

In the first half of 2018, Resilinc notified a record 1,069 events within six months, the highest since the risk management company began monitoring in 2010. Of those events, more than 300 of them directly impacted supply continuity. Among these, natural disasters and weather-related events continue 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 continue to pose a significant threat to supply chains. More than 700 events, including tariffs, mergers and acquisitions, force majeures, price fluctuations, and cyber attacks, indirectly impacted supply chains. Factory fires were the most frequent event type in the first half of 2018.

Key report highlights include:

  • Supply chain impact events occurred at a record rate in the first half of 2018, reaching 29 percent, as compared to 25 percent in 2017 and 19 percent in 2016. In addition, this rate was more than 30 percent in four out of six months in 2018, which has never been seen historically.
  • Factory fire/explosion represents the majority of EventWatch bulletins.
  • North America continues 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.

Resilinc's monitoring service analyzes millions of news stories per month across 53 languages, watches the Internet 24 hours per day, and notifies users about developments that can disrupt supply chains. Resilinc tracks these events and their impact on manufacturing supply chains. To prepare for supply chain disruptions, Resilinc encourages companies to invest in supply chain mapping and disruption monitoring, and to work with suppliers to ensure they are similarly prepared and proactively mitigating the biggest risks.






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