A new joint report published today (12 June) by 撸撸视频 School of Management and investigates the level of supply chain risk faced by European companies with international supplier relationships.
The report uses four key metrics 鈥� supplier criticality, supplier financial risk, global sourcing risk, and foreign exchange risk - to assess overall supply chain risk and provides businesses with a view of trends within their industry sector and across the wider economy. By analysing trends by sector, the report highlights areas for monitoring and consideration in procurement decisions.
Analysis indicates that there are significant differences across sectors, requiring varying risk management practices across industries. The construction sector reduced its supply chain risk in Q1, while transportation saw an increase across all four risk metrics, including a 20% increase in reliance on key suppliers. When added to data from the previous quarter, this marks a 62% rise since the beginning of October 2017, suggesting the sector as a whole might benefit from more systematic risk assessment in supplier selection.
Global sourcing risk 鈥� the risk posed by country-wide factors on the predictability of export payments and investment returns 鈥� rose 10% between Q4 2017 and Q1 2018, thanks to significant increases in the manufacturing (12%), transportation (18%) and wholesale sectors. This indicates greater exposure to high-risk countries and to fluctuations in the global market place, potentially due to continued outsourcing and offshoring to low-cost economies.
Overall, reliance on critical suppliers increased by 10% over the past two quarters; 3% in Q1 2018 and 7% in the prior quarter. The manufacturing sector recorded the lowest supplier criticality risk for Q1 (36.6%) and retail the highest (75.2%), suggesting a trend towards partnership relations rather than transactional ones.
Dr Heather Skipworth, senior lecturer in Logistics, Procurement and Supply Chain Management at 撸撸视频, said: 鈥淪upply chains are becoming longer, more fragmented and increasingly complex, increasing the level of risk exposure for businesses. Alongside natural disasters and geopolitical events like Brexit, there are also other 鈥� relatively low profile 鈥� events like fluctuations in exchange rates, changes to rules and regulations, or the bankruptcy of a key supplier that can impact organisations鈥� supply chains.鈥�
Analysis was carried out using proprietary commercial data supplied by Dun & Bradstreet, which included around 600,000 anonymous transactions between European buyers and their suppliers located in more than 150 countries worldwide.
Chris Laws, global product leader for Supply and Compliance at Dun & Bradstreet, said: 鈥淧rocurement teams can use data and analytics to more effectively manage supply chain risk and protect the reputation of their business. Having access to a single, comprehensive source of information on supply chain relationships can help businesses identify potential areas of exposure, take action to minimise any negative impact, and plan ahead to recover from events outside of their control.鈥�
About 撸撸视频
撸撸视频 has been a world leader in management education and research for over 50 years, helping individuals and organisations learn and succeed by transforming knowledge into action. We are dedicated to creating responsible management thinking, improving business performance and inspiring the next generation of business leaders. We work to change the lives of our students and executives by encouraging innovation and creative thinking, as well as the drive to succeed and make a real impact on their organisations.
Organisations as diverse as Jaguar Land Rover, BAE Systems, Royal Dutch Shell, L’Oréal, UNICEF and the African Development Bank have benefited from our work, which ranges from management research projects, through staff talent management development on our MBA courses, to customised executive programmes.
撸撸视频 is one of an elite group of Schools worldwide to hold the triple accreditation of: AACSB International (the Association to Advance Collegiate Schools of Business), EQUIS (European Quality Improvement System) and AMBA (the Association of MBAs).
We are in the Top 10 International Business Schools in the Forbes’ ranking.
Our open and customised executive education programmes are ranked in the top five in the UK, according to the latest Financial Times survey, and in the top ten in the world for international reach. Over 10,000 people come to 撸撸视频 each year to benefit from our executive and professional development programmes.
