Companies failing to address supply chain dependency threats in Asia, Marsh finds

Filed in archive Research on September 5, 2006

According to a recent survey by Marsh non-Asian companies that have supply chain dependencies in Asia often lack awareness of regional risks and have not addressed these in business continuity plans.

According to Continuity Central, the marsh survey found that 40 percent of respondents were not prepared for a terrorism attack, while only 28 percent were prepared for a natural disaster that could destroy their supply and business operations.

Matthew Elkington, vice-president of Marsh's Risk Consulting Practice, said: "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. For example, according to the European commission, 50 percent of product risk notifications arising in the EU in 2005 originated from China.

"Intellectual property, counterfeiting and ethical risks are often just as important as the more traditional infrastructure, financial and natural disaster considerations and should be given equal weighting on a company's risk agenda," states Mr. Elkington.

The companies that participated in the survey were a combination of multi-national organizations that have supply chains or sites in Asia and independent companies domiciled in the region