First data point indicates shipping disruption will keep risk elevated for early 2021.
Achilles Information, the global leader and partner of choice for supply chain risk and performance management, today launches the Achilles Supply Chain Risk Index (ASCRI), a time series index measuring quarterly changes in supply chain risk. The index brings data from across Achilles’ global network of customers together with information such as shipping and sentiment data. To be published quarterly, the ASCRI measures underlying supply chain risk by country across six categories: economic, environmental, labour practices, legal and governance, resilience and safety and security
An index value of 100 indicates virtually no supply chain risk, and an index value of 1 indicates an extremely high risk of disruption. The most recent data points to slight increase in supply chain risk in the first quarter of 2021, measuring 56.1 for the three months ending in March 2021, as compared to a preliminary reading of 57.5 in the fourth quarter of 2020.
What are the factors creating this increased supply chain risk?
- Ongoing disruptions from the global COVID-19 pandemic as a result of fundamental shifts in purchasing behaviour, and logistic challenges.
- Significant deterioration in shipping reliability, which fell approximately 25% in January; in addition, the impact of the Suez Canal blockage will continue to ripple through shipping lanes and supply chains, disrupting schedules and delaying shipments.
- Key raw material prices are also rising, up 12.6% from the end of 2020 in the opening months of the year, representing a 30% increase on the same period in 2020.
- Sentiment around supply chain risk on social media is, overall, negative regarding Brexit and supply chain disruption, which is reflected as upward pressure on the risk index.
Jay Katzen, CEO, Achilles commented; “I’m delighted to be launching the Achilles Supply Chain Risk Index, at a time when risk management in supply chains has never been more vital or complex. In bringing together Achilles data with other global trends and statistics, and overlaying our expertise to extract useful insight, we’ve created an indispensable tool for everyone involved in supply chain risk and performance management.”
Katie Tamblin, CPO, Achilles, and author of the report commented; “This is a critical time to be analysing risk in the supply chain, and I believe this index has never been more necessary. As global events continue to seriously impact supply chains, our evaluation and analysis of extensive data within the Achilles Supply Chain Risk Index will help businesses better understand the impact and make more informed decisions to reduce risk and improve operational performance.”
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- Achilles Information is the global leader and partner of choice for supply chain risk and performance management.
- Through supplier pre-qualification programmes, industry audits and risk management, Achilles has been a pivotal link between buyers and suppliers for nearly 30 years, providing the data and perspective to give customers unparalleled levels of insight into the businesses they work with.
- Working in partnership with customers, Achilles supports supply chains that perform flawlessly and meet critical humanitarian and environmental standards.
- Achilles has offices across the world, with a network of buyers and suppliers across industrial, infrastructure and natural resources sectors.