Increased Exposure to Supply Risk Across Sectors

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The Global Supply Chain Risk Report is a new joint study by Cranfield School of Management and Dun & Bradstreet. The report investigates actual supply chain risks faced by European companies with international footprints.

Increasing complexity and risk in procurement

Supply chains are becoming longer, more fragmented and increasingly complex, in turn increasing the level of risk exposure for businesses. Alongside natural disasters and geopolitical events like Brexit, there are also other – relatively low profile – events like fluctuations in exchange rates, changes to rules and regulations, or the bankruptcy of a key supplier that can impact organisations’ supply chains.

Procurement teams can use data and analytics, such as the findings from this report, to more effectively manage supply chain risk and protect the reputation of their business. Having access to a single, comprehensive source of information on supply chain relationships can help businesses to identify potential areas of exposure, act to minimise any negative impact, and plan to recover from events outside of their control.

About the report

Experts from Cranfield’s Centre for Logistics and Supply Chain Management have analysed data supplied by Dun & Bradstreet, drawing conclusions from around 600,000 anonymous transactions between European buyers and their suppliers located in more than 150 countries worldwide.

The report looks at four key metrics (Supplier Criticality, Supplier Financial Risk, Global Sourcing Risk and Foreign Exchange risk) to assess supply chain risk and provide businesses with a view of trends within their industry sector, and across the wider economy. The focus industry sectors are Construction, Manufacturing, Retail, Transportation and Wholesale.

By analysing trends by sector, the report highlights areas for monitoring and consideration in procurement decisions.

Key highlights: Q1 2018

  • The construction sector reduced its overall supply chain risk in Q1 2018, while transportation saw increased risk across all four metrics measured
  • Overall, 10% more buyer relationships were with suppliers located in high-risk countries than in the previous quarter, with an 18% increase in the transportation sector
  • Dependency on key suppliers increased 3% in Q1 over Q4, marking a 10% increase in the past two quarters, with the retail sector scoring highest level of dependency at 75.2%
  • Supplier financial risk remained relatively stable across most industry sectors

The full Global Supply Chain Risk Report is available to download from the link below.

Register now for our webinar on 26th June, when we’ll cover the background of the report, the key findings and practical implications for procurement professionals. Follow this link to register.

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