UPS: Companies unprepared for supply chain disruptions

 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, a UPS-sponsored survey said.

   Forty-seven percent of companies admit 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, UPS added.

   The global survey of nearly 350 senior executives was prepared by UPS and the Economist Intelligence Unit.

   Businesses appear to be increasingly vulnerable to supply chain disruptions that can have a catastrophic impact on business performance, said Dan Brutto, president of UPS International. Success in the global economy depends in large part on building successful risk mitigation strategies that can turn a resilient supply chain into a competitive advantage.   UPS said the study found insufficient monitoring, risk assessment and contingency planning are leaving companies ill-prepared when crises hit. One of every 10 companies does not monitor suppliers for anything. About half of the remainder looks only at immediate suppliers. Furthermore, in almost half the companies surveyed, formal risk assessment takes place only annually.   Although some companies are taking sensible precautions to address risk, too many firms are leaving themselves open to unanticipated dangers, Brutto said. And some of the steps companies are taking to improve resilience are not necessarily the best choices.

Source: American Shipper