Global Supply Chain Risk “concentrated and concealed in Sub-tier suppliers”: Resilinc study

Santa Clara, CA–Resilinc Corp., a provider of supply chain resiliency solutions, said that leading global supply chains have become dependent on the same small group of sub-tier suppliers – concentrating the risk and increasing the potential for crippling supply chain disruptions.

Because this sub-tier supplier concentration is occurring deeper in their global supply chains, “many large organizations are not aware of the risks involved. As a result, they are not adequately prepared to mitigate those risks to ensure global supply resiliency,” said the company.

“The results of our sub-tier supply chain analysis underline the critical need for deeper sub-tier dependency insights based on the comprehensive business intelligence Resilinc is able to provide. Sourcing, procurement and supply chain executives need greater visibility into their suppliers’ global footprint and site locations, sub-contractor and sub-tier supplier dependencies, site activities, part’s origin, alternate sites, recovery times, emergency contacts and business continuity planning (BCP) information. Resilinc’s clients are harnessing this intelligence and gaining visibility on an on-going basis so that supply chain resiliency can be institutionalized across the board,” said Bindiya Vakil, CEO of Resilinc. 

Resilinc’s study findings are based on a subset of its global supply chain mapping data from hundreds of suppliers across thousands of supplier sites spread over 50 countries. A detailed analysis of the data was performed in order to identify specific industry trends to assist clients in improving supply chain resiliency planning and sourcing tactics. While the study focused on the high-tech and automotive industries, many of the sub-tier suppliers analyzed also support other global industries. 

Resilinc specifically focused the analysis on sub-tiers “since risks of disruption can often be hidden deep in the global supply chain of large client organizations. The analysis helps Resilinc’s clients respond to their executives’ questions and concerns regarding cross-industry supply chain risk trends and strategies that might be used to lower risk, especially from sub-tier suppliers,” said the study. 

Resilinc clients are also concerned about the scalability and vulnerabilities of their multi-tier supplier chain when planning new product launches, the study suggested. 

Additionally, Resilinc found that more than 50% of all sites analyzed are located in just four countries: Taiwan, China, the USA and Japan. The study further found that a high degree of supplier factory aggregation in a relatively small sub-set of regions creates global supply chain hotspots, and many of these hotspots for high-tech and automotive suppliers are in areas known for susceptibility to natural disasters.

Resilinc said it provides access to extensive supplier sub-tier dependency intelligence enabling customers to leverage visibility information previously published by supplier partners. Supplier partners can publish information in a central repository, and then securely share the information with approved Resilinc customers, said the company, which reported strong customer expansion and growth in the first half of 2013.