@Risk

China is exposed to significant natural threats, including earthquakes, windstorms, floods and tsunamis, and a new study from FM Global revealed there is growing concern that a natural disaster in China will have a severe impact on supply chains –even more than the 2011 Japan earthquake and tsunami did.

The FM Global Supply Chain Risk Study surveyed 100 financial execs at large multinational corporations and found that: (more…)

The semiconductor industry heard some welcome news last week.

Despite a challenging global economy and natural disasters that impacted production in Asia, the Semiconductor Industry Association (SIA) said it expects continued growth in 2011, 2012 and 2013.

More specifically, the SAI endorsed the World Semiconductor Trade Statistics (WSTS) organization’s Autumn 2011 global semiconductor sales forecast which has projected semiconductor sales to grow to $302 Billion for 2011. If that forecast holds, it will be the first time semiconductor sales have reached the $300 Billion mark and will represent a 1.3 percent growth rate over the record-breaking year in 2010.

WSTS tabulates its annual forecast by convening an extensive group of global semiconductor companies that provide accurate and timely indicators of semiconductor trends.

Beyond 2011, the WSTS expects steady, modest growth: a 3.7 percent increase for 2012, and 5.8 percent increase for 2013. (more…)

Scientists at the Joint Research Centre (JRC), the European Commission’s in-house science service, have identified five metals that are both essential for manufacturing low-carbon technologies and at high risk of shortage.

These five metals are: neodymium, dysprosium, indium, tellurium and gallium.

According to the report, titled Critical Metals in Strategic Energy Technologies, the risk of shortage stems from:

• Europe’s dependency on imports (as in the US, virtually the entire European supply of these metals comes from China),
• increasing global demand,
• supply concentration and
• geopolitical issues.

Furthermore, these metals are not easily recyclable or substitutable. (more…)

Recent drug shortages in the US underscore the complexities, interdependencies and volatility of modern global supplier networks.

According to an IMS Institute for Healthcare Informatics study released last week, most of the 168 products on the drug shortage lists compiled by the US Food and Drug Administration and American Society of Health-System Pharmacists have only one or two manufacturers. Thirteen companies have stopped supplying products on the shortages lists within the past two years. As Murray Aitken, executive director, IMS Institute for Healthcare Informatics, points out, this leaves a growing number of products open to possible production disruptions that cannot be offset rapidly by other manufacturers.

“Patients throughout the US, including hundreds of thousands being treated for cancer, may be at risk of treatment disruption due to drug shortages,” Aitken said. “Understanding the nature of these medicines, their suppliers and the supply volume dynamics – and focusing sharply on the market and supply chains that are most impacted – are essential to formulating meaningful solutions to this complex, and often misunderstood, issue.”

The new study, Drug Shortages: A Closer Look at Products, Suppliers and Volume Volatility, also found that: (more…)

In the second annual Carbon Disclosure Project (CDP) Water Disclosure Global Report released last week, more than half (59 percent) of the companies surveyed said they are exposed to water-related risks such as flooding, scarcity and reputational damage.

What’s more, almost four in 10 (38 percent) already have experienced water-related business impacts, including disruption to operations from severe weather events (e.g., flooding) and water shortages.

And companies described most of their water risks as near- term. Nearly two-thirds (66 percent) of risks in the supply chain and 64 percent of risks in direct operations were identified as occurring between now and 2016.

But even so, the report also found that only 57 percent of the 190 publicly listed organizations that participated in the survey implement board-level oversight of water policies, strategies or plans. By comparison, a report released by CDP in September 2011 showed that 94 percent of Global 500 companies report board-level oversight of climate change.

Why the gap? While it’s encouraging to see that awareness about water risks is on the rise, it’s also clear that companies need to strengthen their oversight of water-related issues –particularly in the supply chain. The CDP report revealed that more than one-third of companies (38 percent) are unaware of whether they are exposed to water risk in their supply chains. In the Consumer Discretionary sector, which is dominated by industries that are particularly exposed to supply chain risk (e.g., retailers, hotels, resorts, and automobile manufacturers), that percentage rose to 41 percent.

The report also found that: (more…)