Supply chain risk remains one of the most significant threats to businesses in many industries, but the majority of executives are still not developing strategies to mitigate the problem, according to a report released Friday by UPS Capital and the Global Supply Chain Insitute.
Instead, most companies consider their corporate insurance policies their first and primary line of defense.
In fact, of the 150 firms that were surveyed as part of the study, 90% said they “did not formally quantify supply chain risk when outsourcing production,” and a full 0% said they have reached out to experts to help assess their risk exposure in this area.
Zero!
In the eyes of many executives, apparently, mitigating supply chain risk just is not worth the time or investment.
[Related: Freight increasingly at risk for cyber crime]
“We were surprised by some of the findings regarding the lack of mitigation strategies,” said Dr. Paul Dittmann, executive director of the Global Supply Chain Institute and the study's author. “The supply chain is one area of a company where executives are faced with balancing operational efficiencies, all without actually having direct control over many of the moving parts, thus making risk mitigation strategies almost essential to operations. Any business that does not have some basic form of risk mitigation plans in place is simply gambling with its existence.”
I suspect these corporations' insurance carriers have some different opinions on this issue.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
