Ineffective management of supply chains is leaving organisations open to severe disruptions and the high financial costs incurred as a result. Nearly one in ten organisations are not aware of who their key suppliers are, leaving them open to severe disruption as they are unable to manage their supply chain effectively. This is according to a report published this week by the Business Continuity Institute.

The ‘Supply Chain Resilience’ report show seven in ten organisations do not have full visibility over their entire supply chain. As the survey also suggests that half of disruptions occur beyond the preliminary, tier 1 supplier of goods, these figures highlight the challenge involved in establishing where an organisation lies within its suppliers’ priorities.

This could have major consequences when it comes to managing the supply chain and ensuring that disruptions are minimised, which is particularly important given that the report also found that 74% of organisations had suffered at least one disruption during the previous twelve months and that 14% had suffered cumulative losses of at least E1m as a result.

Nick Wildgoose, global supply chain product Leader at Zurich Insurance Group, said companies are missing out on the competitive advantage that effective supply chain management can bring. “Through our work with customers in this area, we have found that increasing visibility along supply chains and resilience are major sources of competitive advantage. Top management leadership is the key to overcoming silo thinking about supply chains within an organisation.”

Other findings of the report include:

•Unplanned IT and telecommunications outage (64%), cyber attack and data breach (54%) and adverse weather (50%) are the top three causes of supply chain disruption. New entries to the top ten are: product quality incident (8th), business ethics incident (9th) and lack of credit (10th).

•The top five consequences of disruption are loss of productivity (58%), customer complaints (40%), increased cost of working (39%), loss of revenue (38%) and impaired service outcomes (36%).

•One third (33%) of respondents report high top management commitment to supply chain resilience, increasing from 29% last year.

•About seven out of 10 respondents (68%) report having business continuity arrangements in place to deal with supply chain disruptions.

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