Preventing stretched supply chains from snapping under pressure

Due to fierce competition in today’s business environment, supply chains are stretched so tightly that they are liable to snap under pressure. Recent disasters – from the earthquake and tsunami in Japan to floods in Thailand and a parcel bomb in Yemen – have sent ripples down supply chains and transport networks connecting businesses around the world.

Against this backdrop, experts from business and government have been working together through a World Economic Forum initiative to better understand and manage supply chain risks.

Today the Forum released the recommendations in a report entitled New Models for Addressing Supply Chain and Transport Risks, produced in collaboration with Accenture. The report concludes that the most significant threats come from natural disasters, conflict and political unrest, sudden demand shocks, export/import restrictions and terrorism. At the same time, a raft of factors including reliance on oil, extensive subcontracting and lack of supplier visibility are undermining the resilience of networks.

CEOs meeting in Davos discussed the recommendations for improving risk management, which include developing standardized risk assessment tools and building networks that pull together both public and private sector expertise.

To find out more, go to http://www.weforum.org/supplychain.