Cyber-Attacks & IT Outages Are the Main Threat to Supply Chains

Cyber-attacks and data breaches (49%) are the most concerning challenge for professionals both over the next 12 months and the next five years. That is according to the 2018 BCI Supply Chain Resilience Report, published by the Business Continuity Institute (BCI) in collaboration with Zurich Insurance Group.

“Non-physical threats top this year’s causes of disruption, while the uptake of business continuity arrangements continues to grow.”

Other concerns over the next five years also include IT outages (41%) and adverse weather (39%), which are often connected to one another, as IT outages can be a consequence of both adverse weather and cyber-attacks. Over the next 12 months, concerns include health issues, as human illness (25%) and health and safety (24%) feature among the top 10 future challenges.

Following the trend of 2017, the uptake of business continuity arrangements continues to grow. An increasing number of organizations embed business continuity to protect their supply chains. On the other hand, top management commitment, a key factor to ensuring resilience, declined from 2017, from 41% to 33%.

Technology employment to analyse disruptions is still low (38%) and those organizations that use it rely on traditional software rather than advanced solutions. However, the minority of organizations that use technology solutions are more successful at analysing incidents among their suppliers.

There is also an upward trend regarding organizations that have insurance coverage. However, the report highlights that respondents who stated to not have any sort of insurance are not aware of the reason. This reveals a possible awareness gap that could be costly for organizations.

Other findings in the report include:

Reporting of supply chain disruptions has increased since 2017, going from 70% to 73%, and overall the majority of organizations have consistently shown a growing level of reporting over previous years (68% on average).
The number of organizations suffering a disruption in the past 12 months has decreased – from 65% to 56%. However, the number of organizations not aware about disruptions has grown – from 10% in 2017 to 16% in 2018.
52% (8% more than 2017) organizations reported supply chain disruptions among their Tier 1 suppliers, while an increased number of responders (+8% since 2017) admitted to not analysing the full extent if their supply chain in case of disruption.
The threat landscape for supply chains has changed since 2017. While unplanned IT and communications outages (53%) remain the top cause of disruption, adverse weather (41%) follows up (rising from sixth place in 2017) with cyber-attacks and data breaches (33%), loss of talent/skills (30%), and transport network disruption (27%).

“Supply chains are exposed to risks and threats of various nature. As organizations become increasingly interconnected through global networks, their growing complexity makes them more vulnerable to disruptions,” said David Thorp, Executive Director of the BCI. “Through the years we have seen higher levels of awareness and adoption of best practices, and we are moving towards more resilient supply chains. However, opportunities of refinement are still there and collaboration among network is an essential element in keeping the supply chain intact.”

For more information, contact Marianna Pallini, Business Continuity Institute Communications, at marianna.pallini@thebci.org.