Supply chains are critical to millions of organizations around the world. In some cases, 50% to 80% of a company’s costs can be directly linked to the supply chain.
In fact, one of the most common key performance
indicators (KPIs) across all companies within the industry is delivering products to the customer on time, and if there were an interruption, it would represent a failure within the process.
“… 70% of organizations surveyed indicated that they had experienced some type of disruption in their supply chain. Within that same group, 2% of those surveyed revealed that they had suffered a loss of more than $50 million due to such disruptions.”
Dun & Bradstreet experts often express surprise at the fact that many companies have little knowledge about which of their larger suppliers have risks and exposures from smaller suppliers. In short, they don’t know who supplies their suppliers.
Known as Tier N, these smaller entities branch out to several lower levels within the supply chain, and little is known about their risk exposures. In some cases, these organizations are shrouded in mystery compared to the transparency of larger suppliers.
This lack of visibility translates into vulnerability
Not knowing the depth of your supply chain leaves you at the mercy of unfortunate disruptions within normal situations that can end up costing tens of millions of dollars. However, gaining a deep understanding of your supply middle east mobile number list chain is harder than it seems. Data in your supply network is often fragmented, unreliable, and layered across multiple locations and business entities.
Even if you manage to create an accurate map of your supply chain, the data collected can become outdated very quickly.
Most global organizations are at risk of a disruption in their supply chain
So how serious are these disruptions? According to a 2016 BCI Supply Chain Resilience survey, 70% of organizations surveyed indicated they had experienced some form of supply chain disruption. Within that same group, 2% of those surveyed covid-19 Impact Index revealed they had suffered a loss of more than $50 million due to such disruptions.
Top 5 Causes of Supply Chain Disruption
- Unplanned IT and telecommunications outages.
- Loss of workers.
- Cyberattacks and data leaks
- Transmission network interruption.
- Failures in the subcontracting process
And where are these disruptions happening? Mostly with Tier 1 direct suppliers, but nearly half are with Tier N suppliers, and many companies are not actively analyzing where exactly these disruptions are happening and why. Too many organizations take the blasé attitude of, “It’s happening at Tier 1? I don’t know anything about it. There’s not much that can be done.”
These companies must take a proactive stance to address these disruptions fans data and learn how to prevent their negative impacts on the entire organization. The three main issues we must consider when analyzing the sub-levels of the supply chain are:
The 3 points to consider when analyzing the sub-levels of the supply chain are:
- Sudden risk of changing regulations or natural hazards: This may manifest itself in the form of legislation passed in the country where your Tier N supplier is located. It may also be the case where your supplier resides in a high geographic risk region of the world. For example, the current global Covid-19 emergency has led to the temporary disruption of certain facilities around the world and all types of industries.
- Poor visibility: Tier N suppliers are difficult to identify. Some reside in unstable countries subject to the whims of changing governments or competing factions. You can adjust your supply chain if you know a specific Tier N supplier makes items in a country on the brink of civil war. 54% of executives admit their companies don’t look beyond Tier 1 (KPMG).