Study: Supply chain disruptions growing more serious

Supply chain disruptions are never appreciated, but as the years progress, those disruptions are becoming less and less a simple matter of fixing. According to this article by Sean Kilcarr, the economic impact of supply chain disruptions has increased. This makes perfect sense: more supply chains are stretching over the length of the earth, and that can cause some very troubling impacts if there is a natural or political disaster in a country which hosts an element of a worldwide supply chain. The article explains how a 2013 logistics study compiled by Penn State University found that “economic losses due to supply chain disruptions increased by 454% over the last three years”, resulting in a climb of over $350 billion dollars in 2011. Shanton Wilcox (a study author and principal at Capgemini Consulting) spoke to how this problem would surely only increase without supply chain professionals taking broader steps towards to recognizing and mitigating supply chain disruptions. Third party logistics (3PLs) and shippers are aware of this problem, but might not be putting the right resources into handling it: For example, he [Wilcox] noted that the survey indicated fully 69% of 3PLs and 68% of shippers plan to invest more in supply chain “partnerships” over the next two years, with 62% and 61%, respectively, looking to invest more in business continuity tools during that same time frame. Yet only 32% of either group plans to invest in supply chain mapping tools, which Wilcox believes is a vital tool to help alleviate the impact of various disruptive events. Wilcox believes that understanding how your supply chains are laid out: where each vendor is physically located, which part feeds to the next, and where they get their material from, all contribute to disruption (which results in huge net losses for the business).

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