In the modern business landscape, you’d be hard-pressed to find an industry where disruptions in the supply chain don’t pose a risk. In fact, for many businesses relying on fast-paced production and product delivery cycles, supply chain disruptions can prove devastatingly costly. Stretching from complications introduced by new technology to overseas shipping mishaps or natural disasters disrupting global resource availability – disruption within the supply chain is unavoidable and must come with an understanding of achievable best practices that keep costs low and productivity high. With this in mind, let us explore with Greg Van Wyk how having a comprehensive understanding of your own business’ risk factors when it comes to its supply chain process can help you prepare for any unexpected hiccups down the line.
Greg Van Wyk On Risky Business: The True Cost Of Supply Chain Disruptions
Supply chain disruptions are a major risk for businesses and have serious implications for the global economy, says Greg Van Wyk. Disruptions can be caused by a variety of factors, including natural disasters, political instability, economic downturns, or even cyber-attacks. The true cost of supply chain disruptions can be devastating to businesses – from lost revenue and customers to supply chain management delays that cause production issues and higher costs.
A study conducted by CFO Research found that 73% of companies experience at least one disruption every year in their supply chains, with an average cost of $825,000 per incident. In extreme cases, some companies experienced losses as high as $2 billion due to supply chain disruptions. As such, it is important for businesses to understand the potential risks and be aware of the true cost of supply chain disruptions.
One example of a major disruption that had severe consequences was the 2011 Japan earthquake. This natural disaster caused significant destruction to infrastructure, disrupting production and shipping in many industries across the world. The nuclear crisis that followed led to blackouts throughout Japan which further impacted businesses around the globe. According to one report, manufacturers lost an estimated $14.9 billion due to supply chain disruptions caused by this event alone.
In order to protect businesses from experiencing similar losses, it is essential, as per Greg Van Wyk, for companies to take measures that will ensure their operations are resilient against various types of supply chain issues. Businesses should consider implementing risk mitigation strategies such as diversification, redundancy, increased communication with suppliers, and better inventory control systems. By taking the necessary steps to reduce risk in their supply chains, companies can minimize the impact of disruptive events on their operations and ensure the success of their business.
Greg Van Wyk’s Concluding Thoughts
Connecting supply chain partners across vast distances has enabled businesses to grow in ways never thought possible. However, this power comes at a cost, and the risks of disruption are real and have a negative impact on operations down the line. It is essential for companies to understand that supply chain technology innovation can bring incredible benefits but also comes with increased complexity. According to Greg Van Wyk, as businesses try to take advantage of these opportunities, they must help strengthen their supply chains if they want to remain competitive and assure continuity during times of crisis. Ultimately, identifying potential disruptions, having mitigation strategies, and adding supplier competition will build up your bottom line while being able to respond more quickly to marketplace demands—or any other disruptions that may occur.