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Mid-sized businesses lose £200,000 due to disruptions

Mid-sized businesses are losing up to £200,000 a year due to supply chain disruption - yet more than half take no precautions to protect themselves against it.

Nearly 90% of mid-sized firms have been affected by supply chain disruptions, including the Japanese tsunami and the Thai floods, which have caused major financial losses and damage to reputation.

Furthermore, financial constraints and a lack of time to review processes mean that many businesses have little incentive to better prepare for future disruptions to the supply chain.

Zurich Insurance, who conducted the research, are increasingly concerned by this lack of preparation, especially in the face of the London Olympics which is predicted to cause even greater disruptions.

Nick Wildgoose, Global head of Supply Chain at Zurich is now advising businesses to take the necessary precautions to protect themselves against the potential damage a lack of planning could do.

Speaking to Real Business he said: “Bigger companies tend do more to prepare, because they have more resources available.

“But they all have room for improvement in this area. I hope this report is another catalyst to increase the awareness that this is a real issue the board should be more concerned about.”

While all sectors have been hit by financial impacts and disruptions, manufactures are the group who have been most adversely affecting, taking an average hit of £228,608 over the past 12 months.

Nick added: “Companies are generally becoming more and more dependent on supply chains, but some differences across sectors are not surprising.

“The lack of preparation and business continuity planning amongst businesses, particularly those who are highly dependent on suppliers, is alarming. Businesses need to map out their key suppliers and plan for the worst case scenario, or suffer significant disruptions and associated financial impacts.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .