Decrease in disruptions in global supply chains

Global supply chains have stabilized over the past year. The number of disruptions decreased by 5% year-on-year, according to a report by Resilinc on the leading causes of supply chain disturbances. The data was collected by Resilinc’s EventWatch AI, a 24/7 risk-monitoring database.

Last year, the top five disruptions were – in order of importance – factory fires, mergers & acquisitions, labour disruptions, business sales and factory disruptions. Factory fires retained their position as the No. 1 problem for the fifth consecutive year, with 2,848 reported incidents. However, this number fell by 21% compared to 2022, which saw a record high.

Mergers and acquisitions, along with business sales, are also in the top five supply chain disruptions for 2023. While notifications of mergers and acquisitions fell by 14% compared to 2022, notifications relating to business sales actually increased by just over 7%.

Labour disruptions

A notable new addition to the top five for 2023 were labour disruptions. With an 89% year-on-year increase, labour issues had a major impact on industries worldwide. Labour disruptions such as strikes, material shortages, stoppages and layoffs caused significant disturbances. The top five is completed by factory disruptions, which showed a 16% increase.

However, the number of disruptions overall is stabilizing. In some historically high-risk areas, it is even decreasing significantly. However, there was also a significant increase in other emerging risk areas compared to last year. In particular, the number of reports of bankruptcies rose sharply by 190%; this is the largest increase of all risk events monitored by Resilinc. Rising interest rates, persistent inflation and accrued corporate debt during historically low interest rate periods are said to underlie the high number of corporate bankruptcies.

Extreme weather

Other notable trends emerging from Resilinc’s data include an increase in reports related to extreme weather (forest fires +26% and tornadoes +108%); financial risks (profit warnings +103% and corporate restructurings +79%); ESG and compliance risks (reports related to FDA/EMA/OSHA actions +73% and reports related to fines +66%); and cyberattacks (+34%).

The five most disrupted industries were life sciences, healthcare, general manufacturing, high-tech and automotive. These particular industries had the most impact in 2023 for the third year in a row.

WarRoom

Out of all the 16,103 EventWatch AI notifications sent, more than half (55%) had enough impact to create a ‘WarRoom’ – a virtual platform in the Resilinc dashboard where customers and their suppliers communicate and collaborate to assess and resolve disruptions.

Resilinc’s EventWatch AI database gathers information 24/7 worldwide. To do so, it tracks news about 400 different types of disruptions through 104 million sources, including traditional news sources, social media platforms, news services, videos and government reports.