3 Takeaways from the Latest Business Continuity Institute Report

Every year, the Business Continuity Institute surveys companies from around the world to learn about their business continuity practices. The 2018 report is based on data from 589 respondents representing 76 countries, and is full of some great information about what companies are doing to make their businesses more resilient. To save you the long read, I've taken the liberty of pulling out what I think are the most revealing stats in the report:

• 56% of companies experienced a supply chain disruption in the past 12 months
• Two of the top impacts of a supply chain disruption are financial loss and reputational damage
• 30% of businesses do not analyze the source of supply chain disruptions

#1: 56% of Companies Experienced a Supply Chain Disruption in the Past 12 Months

This is a number that is consistent from year to year—a majority of companies suffer from a recent supply chain disruption. It could be a natural disaster, a port closure, a fire…the list goes on. But the bottom line is that supply chain disruptions happen frequently. The most important thing to realize, though, is that it’s a mistake to think there’s nothing you can do about them. With a proper course of action, you can not only address disruptions quickly and effectively once they happen, you can also take proactive action based on predictive insights and avoid disruptions before they occur. There are major repercussions to supply chain risk—but with the proper tools in place, they don’t have to affect you.

#2: Financial Loss and Reputational Damage: Two Top Impacts of Supply Disruption

The BCI report also showed that two of the top impacts of a supply chain disruption were financial loss and reputational damage. No one should be surprised about financial loss—when something disrupts your business, you’re going to lose money. If you can’t deliver goods to your customer, you’re going to lose money. If a shipment of your supplies is destroyed in a hurricane, you’re going to lose money. If a strike shuts down some of your key plants, you’re going to lose money. This is a no-brainer. We're not surprised, and neither are you.

This is why we think the reputational aspect of this story is so important. What people don’t realize often enough is the reputational damage that a supply chain disruption can have. Imagine, for example, that one of your suppliers suddenly ends up in the news because of child labor violations—and you find out about it when your social media team tells you that customers are rioting on Twitter. Being on top of your supply chain isn’t just about fighting literal fires. It’s about knowing how to deal with the figurative ones, too—and, more importantly, avoiding them in the first  place.

#3: 30% of Businesses Do Not Analyze the Source of Supply Chain Disruption

We saved the most shocking stat for last: 30% of businesses do not analyze the source of supply chain disruptions.

30%? Can you imagine having an event disrupt your business and not know why? This is what’s happening with supply chains. Why were our parts delivered late? Don’t know. Why was the quality of our supplies compromised? Don’t know. What can we do to prevent this in the future? Don’t know.

“Don’t know” is not an acceptable answer to any of these questions. And that’s really what this all boils down to: Can your procurement and logistics department answer these questions?

If not, it’s time to get cracking. The next BCI report is only a few months away—and you don’t want to be in the majority of companies reporting back on their own supply chain disruptions.