Australian companies and supply chain risk

Filed in archive Market Overview on December 18, 2009

The waves of economic crisis we were facing in 2008 and 2009 seem to be over, but apparently not for Australian companies:

The other day I read the result of a research done by an Australian research company which was showing many Australian suppliers are exposed to supply chain risk.

The research, conducted on more than 24,000 of Australia's leading suppliers, reveals that nearly 7,000 were part of a broader group of companies and, of the 5,700 ultimate parents, around 2,000 were domiciled in another country. Nearly 1,500 of those 2,000 foreign domiciled companies are based in economies that have experienced some of the greatest distress from the global economic slowdown.

Of the ultimate parent companies examined in the study, 3% are classified as being in financial distress and a further 8% are categorised as at high risk of experiencing financial distress or failure in the months ahead.

According to Christine Christian, D&B's CEO, it is critical that procurement professionals understand the full extent of their supply chain risk, no matter what the economic environment.