BusinessInsurance.com reports on a Marsh survey of global companies that have a supply chain presence in Asia and finds that most companies are not adequately prepared for the possible risks involved:

According to the study, only 28% of respondents said they were fully prepared for, and could maintain business as usual in the event of, a natural disaster affecting one of their key facilities or suppliers in Asia.

More than half, 52%, of respondents said they have some contingency arrangements in place but that operations or suppliers would suffer significant delays if a natural catastrophe hit, while 20% of those surveyed said they had no contingency plans at all.

More than one-third, 36%, of companies surveyed said they did not know how vulnerable their key operations in Asia are to a direct or indirect terrorist attack.

But the same proportion, 36%, said their key operations were not vulnerable to such attacks.

Almost one-quarter, 24%, said they were vulnerable to such attacks but ready to react in the event of a crisis, while 4% said they were vulnerable but currently had no crisis management plans in place.

Less than one-quarter of those companies surveyed, 21%, said they had full business continuity plans in place to deal with the effect of a pandemic causing widespread employee absence and/or disrupting their supply chains.
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“The dramatic rise in supply dependencies with Asia, and in particular China, creates significant and diverse risk exposures, several of which are unique to the region in terms of their nature or severity” said Matthew Elkington, vp of Marsh’s risk consulting practice in London, in a statement.

In order to manage supply chain risks in Asia, businesses should map their risk exposure, identify and prioritize major issues, and monitor and control processes, among other things, he said.

As most of the business world continues to rush headlong into China and other parts of Asia, it seems few are prepared for the risks involved and do not have proper contingency and business continuity plans in place in case of a situation involving their Asian supply chains.

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