Publisher’s Note: Ardent Partners is pleased to make available its new Research Alert “Bad Moon Rising: Global Supply Chain Risk Reaches 20-Year High; Global Supply Chains Largely Untested” at no cost and without registration through March 8th.
Bad Moon Rising
“I see a bad moon a-rising – I see trouble on the way” ~ Creedence Clearwater Revival
Today, Ardent Partners, the established leader in supply management market research, has published a new report that identifies unprecedented levels of risk across the vastly complex and highly interconnected supply chains that drive and support the global economy. Compounding the risk is the fact that these supply chains are universally untested, leaving a majority companies ill-prepared to deal with any near-term global shock or risk event.
Today’s global supply chains are a largely 21st-Century phenomena, driven by the demand for lower-cost sources of supply and production and bolstered by the rapid advances in technology and communication. These global supply chains delivered extraordinary value to the Western-based corporations that initially moved supply off-shore in the pursuit of lower costs. Over the ensuing two decades, manufacturing capabilities expanded rapidly across the traditional low-cost regions (including Asia, Eastern Europe, as well as regions within Africa and across Central and South America) spawning the current age of globalization and innovation.
In the face of heightened geopolitical and economic uncertainty and an increase in “event-specific” risks, like the current coronavirus (known formally as COVID-19) outbreak, political upheaval within specific countries, new and erratic trade policies/agreements, and environmental events, it has gone largely unnoticed that global supply chains, by and large, are ill-prepared for any major global shock or event and remain almost universally untested.
In fact, Ardent Partners’ latest supply management research covering more than 700 global enterprises has shown that
- 79% of all businesses lack a comprehensive risk management program in place for their strategic suppliers.
- 66% of all businesses lack an active supply risk management program.
- Only 9% of all businesses have prioritized improving supply risk management over the next 12 months.
And, while it is true that various country-based and industry-focused supply chains have faced serious disruptions (with varying degrees of success) over the last decade, none have had to confront a large and global-reaching risk event or series of events.
Under normal circumstances, insufficient risk management is cause for concern. With supply risk levels at a 20-year high, the pervasive inadequacies of corporate supply risk management capabilities are cause for outright alarm.
This special research alert highlights the most immediate and urgent risks facing today’s global supply chains and outlines the steps that corporate leaders (including those in supply chain, procurement, finance, and manufacturing) should be taking to prepare for and mitigate against supply chain risk in 2020.
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