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Resilinc Publishes 2016 EventWatch Supply Chain Disruption Annual Report

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

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

“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.  Also, 2016 saw a higher frequency of low impact disruption events over the previous year. Business-related events such as Mergers & Acquisitions, Business Sale and Reorganization/Management Change were most common events notified,” said Shahzaib Khan, director of EventWatch at Resilinc.

The report also reveals The EventWatch Top 5 ™ supply chain events of 2016. The top 5 event ranking is driven by estimated aggregate 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 5 events of 2016 in terms of impact to businesses, were

  1.  6.4 Magnitude Earthquake in Taiwan, February
  2.  Series of earthquakes in Japan, April
  3. Typhoon Haima which hit Taiwan, China and the Philippines
  4. Typhoon Napartak and
  5. 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.

Key report highlights:

  • Mergers & Acquisitions represented the majority of EventWatch bulletins in 2016 with 20% of bulletins notified.
  • Despite the increase in the total number of factory fire events notified in 2016, Factory Fires/Explosion dropped slightly from 17% in 2015 to 13% in 2016, falling to the 2nd 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 Merger & Acquisition 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 the following:

  • Which disruption event types are most common or becoming more common?
  • How does my industry compare to other industries in terms of the number of events experienced?
  • Which regions are impacted the most?
  • And, what months see the most disruptive incidents? 

What makes the EventWatch Annual Report different from “Top 10 Supply Chain Event” lists and other year-end reports and commentary is that it 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.  This contrasts with other publications that provide assessments which may be based on estimates of damage to public property, infrastructure or insured property estimates; this tends to bias the focus toward downstream or logistics-related disruptions without providing clarity on impact to companies or manufacturers.

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 POTUS.  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.

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