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  February 1st, 2017 | Written by

Report Names Top Five Supply Chain Events of 2016

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  • Hanjin bankruptcy was a major disruptor of global supply chains in 2016.
  • The top five supply-chain disruptions in 2016 were all earthquakes or weather events.
  • 2016 saw a higher frequency of low impact disruption events over the previous year.

Resilinc released its 2016 supply chain events annual report last week which summarizes and analyzes nearly 1500 unique supply chain notifications and alerts generated by its EventWatch 24X7 global event monitoring, alert, and analysis service.

The annual report analyzed incidents by risk type, industry, geography, severity, and seasonality and compared 2016 data in these categories with 2014 and 2015.

Supply chain risk management practitioners subscribe to the EventWatch service to receive early warnings and analysis of supply chain incidents that can negatively impact revenue, market share, customer satisfaction, and shareholder value. EventWatch is the only service of its kind that personalizes the EventWatch client’s potential impact at the supplier site and part levels to quantify the potential revenue at risk. Most importantly, suppliers share impact confirmation in real time for each event on the platform.

“The earthquakes that impacted southern Taiwan and Japan in the first half of the year, and the bankruptcy declaration of Hanjin Shipping caused considerable disruptions to global supply chains,” said Shahzaib Khan, director of EventWatch at Resilinc. “Also, 2016 saw a higher frequency of low impact disruption events over the previous year. Business-related events such as mergers and acquisitions, business sales, and reorganizations were most common events notified.”

The report also revealed the Top Five supply chain events of 2016, driven by the estimated revenue impact felt by manufacturers across the supply chain. This was calculated leveraging Resilinc’s database of over 70,000 supplier sites and approximately 1.8 million parts which are tracked in its supplier intelligence big data repository.

The top five events of 2016 in terms of impact to businesses, were: the 6.4 magnitude earthquake in Taiwan, February; a series of earthquakes in Japan, April; Typhoon Haima which hit Taiwan, China, and the Philippines; Typhoon Napartak; and Typhoon Megi, which both affected parts of Taiwan and China.

Information in the annual report provides estimates of revenue impact, average site time-to-recovery (TTR), the number of parts affected and the number of sites affected.

Among other report highlights, mergers and acquisitions represented the majority of EventWatch bulletins in 2016, with 20 percent of bulletins notified. Despite the increase in the total number of factory fire events notified in 2016, factory fires and explosions dropped slightly from 17 percent in 2015 to 13 percent in 2016, falling to the second position for the first time.

For the first time, life sciences overtook the automotive industry as the most frequently impacted industry, fueled by an increase in mergers and acquisitions and FDA/EMA Action bulletins.

In 2016, the majority of supply chain events reported by EventWatch occurred in North America, overtaking Asia, which had the majority of events in 2015.

The report highlights global supply chain risk trends through a variety of lenses. It helps stakeholders to understand which disruption event types are becoming more common; how industries compare; which regions are impacted the most; and what months see the most disruptive incidents

The EventWatch Annual Report is driven by data collected from thousands of companies, and focuses on impacts to specific brands, suppliers, sites, and parts, based on a calculation of value-at-risk for manufacturers and incorporates confirmation of impact to supply chain operations.

Two other important changes occurred in 2016 that have medium to long term supply chain impact potential. These are, Brexit and the election of Donald Trump as president of the United States. While the impact to supply chains worldwide is not yet known or realized, these 2016 developments have the potential to change the makeup of global supply chains in the years to come.