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 Is your supply chain ready for anything? The Resilient Supply Chain Benchmark In an era of turbulence marked by more frequent and intense supply chain disruptions, companies can better position themselves by investing in supply chain resilience. A balance between operational and strategic resilience underlies the Resilient Supply Chain Benchmark, which was developed by The Economist Intelligence Unit with the support of the Association for Supply Chain Management (ASCM). The supply chain’s ability to bounce back and recover to a normal state of affairs Operational supply chain resilience Strategic supply chain resilience The supply chain’s ability to bounce forward and adapt to a new normal Retail Today’s complex threat matrix: Risks most likely to cause severe supply chain disruptions over the next 12 months (%) Covid-19 has brought the reality of doing business in a high-risk world into sharper focus, with businesses, the public and investors all gaining unprecedented awareness of supply chain disruptions. When asked to name three main objectives of their supply chain strategy over the coming year, benchmarked companies ranked increasing supply chain resilience as one of their top objectives, behind only increasing sales growth and increasing customer satisfaction and experience. 1 Increasing sales growth Increasing customer satisfaction and experience Increasing supply chain resilience Planning Checklist Identify triggers Assign roles and responsibilities across multiple functions Outline key steps to be taken when a disruption hits Pharmaceutical A majority (65%) of pharmaceutical companies stated they had plans that identified triggers and outlined steps to be taken in the event of a crisis, with companies of all sizes performing evenly. Respondents were asked to select up to three. 51% Pandemics 29% Extreme weather 46% Cyber attacks 28% Geopolitical instability 39% Market changes and demand shifts 28% Rising labor costs 32% Supplier/partner bankruptcy 26% Theft, illicit trade, or counterfeiting 30% Natural disasters 22% Raw material scarcity 2 3 A winning play: Medium and large consumer electronics companies lead the way Business continuity plans or playbooks should be blueprints for coordinating a real-time response in the event of a supply chain disruption. Retail Only 45% of benchmarked retail companies have plans in place that identify triggers and outline steps to be taken in the event of a disruption. 45% Larger retail companies are more likely to have plans that meet these criteria, but their scores still lag averages in other sectors. Consumer electronics By contrast, 74% of benchmarked consumer electronics firms with annual revenues greater than $250M responded that their plans had triggers and outlined steps to be taken in the event of a disruption. Benchmarked consumer electronics firms with less than $250M in annual revenues weren’t as well prepared, with only 33% stating that they have plans that meet these criteria. Annual revenues Less than $250M $250M to less than $1B $1B or more 74% 33% There is an increasing convergence between supply chain resilience and supply chain sustainability. Reflecting this shift, making the supply chain more socially and environmentally sustainable is the number one way that benchmarked companies plan to build resilience over the next 3 to 5 years. How benchmarked companies plan to build supply chain resilience over the next 3-5 years (%) Respondents were asked to select up to three. Making the supply chain more socially and environmentally sustainable Better business continuity plans, contingency plans, or playbooks Better collaboration across functions within the company Better system integration with suppliers (i.e., cloud-based systems) Reducing complexity in the supply chain (i.e., reducing the number of SKUs in the product portfolio) Better understanding the financial and operational health of suppliers Increasing digital agility in the supply chain Introducing greater circularity into the supply chain Using a multi-sourcing strategy Adopting IoT, 3D Printing, or blockchain technologies Maintaining higher inventory along the supply chain Nearshoring or regionalizing the supply chain None of the above Charting the journey to greater supply chain resilience 33% 48% 45% Climate change mitigation: Reducing (scope 3) carbon emissions On average, 60% of a company’s carbon risk lies in its supply chain.1 60% Prepare for disruption Is your supply chain ready for anything? The benchmark covers companies in three sectors Annual revenue less than $250M Annual revenue more than $250M 65% Consumer electronics Pharmaceutical Just over half of benchmarked companies (54%) have assessed how carbon pricing (e.g, a carbon tax, or a cap-and-trade system) will affect their company and its supply chain. 54% Less than half (42%) of benchmarked companies have set targets to reduce supply chain-related (scope 3) carbon emissions. 42% Read the report, “Ready for Anything? Turbulence and the Resilience Imperative,” and use the Resilient Supply Chain Benchmark to assess your company's supply chain capabilities against industry peers, so you can better prepare for the next disruption whenever it comes. 1. https://www.economist.com/special-report/2020/09/17/costs-of-carbon © Copyright The Economist Intelligence Unit, 2021 SPONSORED BY 1% The Resilient Supply Chain Benchmark reveals a number of gaps and opportunities for improvement that if addressed could position companies to better withstand the dangers of our turbulent times, including: Improving end-to-end visibility by integrating partners into key activities and systems Proactive collaboration to improve the credibility of sustainability and emissions initiatives Building long-term relationships with supply chain partners Stronger engagement between supply chain managers and executive leadership 14% 24% 23% 20% 20% 20% 27% 27% 26% 26% 24% 24%

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