Zurich: Supply chain issues lose UK tech firms £207,000 a year
Insurance provider counts cost of supply chain problems on mid-sized tech firms.
Supply chain disruptions are costing mid-sized UK tech firms an average of 207,000 a year, according to findings from the Zurich Financial Services Group.
The company's Weakest Link: UK Plc's Supply Chain report looked at 500 businesses in five sectors: manufacturing, technology, food and beverage, sport leisure and entertainment and wholesale businesses.
Eighty-eight per cent of organisations across all five sectors have reportedly experienced "significant disruptions" to their supply chain.
Dave Carey, head of corporate insurance at Zurich, said: "The research shows that mid-corporate businesses, across a variety of sectors, are still prone to severe supply chain disruptions that can dramatically affect their bottom line.
"A well managed and maintained supply chain is essential to the efficient workings of a company. However, the failure to prepare for the worse scenarios can have devastating consequences that resonate across a business, regardless of size," he added.
Eighty-eight per cent of technology companies reported disruptions, with the top three most common causes being IT outages (52 per cent), adverse weather (40 per cent), and product quality incidents (39 percent).
The report showed that technology companies experienced an average of five weeks of disruption because of supply chain challengers, with half experiencing loss of orders and sales.
Fourty-eight percent reported increased operating costs and 41 per cent suffered reputational damage.
Despite the contribution supply chain management makes to a company's bottom line, 60 per cent of technology firms said they had not reviewed their supply chain arrangements in the past six months.
Nick Wildgoose, global head of supply chain at Zurich, said: "The lack of preparation and business continuity planning amongst businesses, particularly those who are highly dependent on suppliers, is alarming.
"This is despite high profile events such as the volcanic ash cloud, the Japanese tsunami or the Thai floods, for example.
"Businesses need to map out their key suppliers and plan for the worst case scenario, or suffer significant disruptions and associated financial impacts," he concluded.
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