Supply chain risks shift from manufacturing to financial weaknesses
Growth in disruptive supply chain events appears to be slowing in H1 2023, but financial risks soar as bankruptcies jump 196%
Supply chain disruptions increased by 3% year-on-year between January and June 2023 according to monitoring by supply chain mapping company Resilinc. This marked a slowdown in the growth of these events, but financial stress signs exploded in the period, marking a changing risk profile for supply chains.
Bankruptcies rose 196%, profit warnings 300% and there was a 125% increase in corporate restructuring.
Alongside these growing issues, labour disruptions, which include company, site-level and national strikes, redundancies and labour protests, have increased by a factor of 136%, while disruptions to factories increased by 30% year on year.
Overall, the company which also deals in disruption sensing and resiliency analytics, reported a total of 8,197 disruptions. It is noted that the number of disruptions is slowing down compared to previous years.
The industries most affected by supply chain disruptions were healthcare, hi-tech, automotive, aerospace, and food and beverage.
The most common disruptions during this period were factory fires, mergers and acquisitions, business sales, leadership transition, factory disruption, legal action, labour disruption, cyberattack, port disruption and recall.
Factory fires remained the main area of disruption but with 1,642 notifications during the period covered, but this represented a nearly 20% decline year-over-year. This is thought to be accounted for by production decreases due to lower consumer demand and the restoration of maintenance procedures following the Covid-19 pandemic.