Tuesday, September 05, 2006

Companies failing to address supply chain dependency threats in Asia, Marsh finds

According to a recent survey by Marsh non-Asian companies that have supply chain dependencies in Asia often lack awareness of regional risks and have not addressed these in business continuity plans.

According to Continuity Central, the Marsh survey found that 40 percent of respondents were not prepared for a terrorism attack, while only 28 percent were prepared for a natural disaster that could destroy their supply and business operations.

Matthew Elkington, vice-president of Marsh's Risk Consulting Practice, said: "The dramatic rise in supply dependencies with Asia, and in particular China, creates significant and diverse risk exposures, several of which are unique to the region in terms of their nature or severity. For example, according to the European commission, 50 percent of product risk notifications arising in the EU in 2005 originated from China.

"Intellectual property, counterfeiting and ethical risks are often just as important as the more traditional infrastructure, financial and natural disaster considerations and should be given equal weighting on a company's risk agenda," states Mr. Elkington.

The companies that participated in the survey were a combination of multi-national organizations that have supply chains or sites in Asia and independent companies domiciled in the region

(Source: SupplyChainer.com)


Anonymous Anonymous said...

Supply chain risk seems to be the topic of the day. An illustrious example of risks in sourcing mini hard disks for IPod from Philiphines is featured in ZDNetAsia. The threat from earthquakes and flood is real and serious. Read more


4:29 PM  
Anonymous Anonymous said...

Dependency on Asia for supply chain no doubt exposes the western countries to certain amount of risk as part of the chain is in geographical area beyond their physical control and also less visible as far as real time data is concerned. The longer the chain, the greater the risk unless one is careful to choose supply chain partners with similar business and cultural values.

1:26 PM  

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