An Ernst & Young (E&Y) Transaction Advisory Service (TAS) report has suggested that the threat of a company suffering from a failed supplier is rising, putting supply chain management at the forefront of business planning in 2009.
The E&Y LLP poll, conducted in January, found that 67 per cent of companies would be adversely affected if one of their top three suppliers failed, highlighting the acute importance of the supply chain.
"Supplier risk is an order of magnitude greater than it has been in decades," said Mark Short, partner at E&Y LLP TAS.
"Companies are faced with deteriorating cash and credit conditions, and at the same time, an increasingly complex, integrated supply chain."
Small and medium-sized companies could use a third-party supply chain management company in order to reduce its exposure to failing suppliers.
A third-party organisation could use its experience of the supply chain industry to ensure a company makes the most of its opportunity to both reduce the risk it faces from failing suppliers and also cut costs, offering several benefits at a time when they are needed the most.
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