Many businesses are guilty of overconfidence when it comes to the risks threatening their supply chains.
The findings come from Marsh, which found the misplaced self-belief of some firms was leaving them vulnerable to economic conditions and physical disruptions.
More than three in five of respondents acknowledged that business continuity management (BCM) was vital to their risk management, but only 29 per cent said it had led to improve risk-intelligent decision making.
It also revealed that companies concentrate BCM plans on physical supply chain risks over non-damage related risks, including those caused by the Icelandic volcano and air traffic disruption.
There was also found to be a distinction between the attitudes of manufacturing firms and financial services firms, as High Morris, managing consultant in Marsh Risk Consulting, explained: "The more obvious nature of physical supply chain risks is apparent to manufacturing firms, while only the most advanced financial services firms realize how important and vulnerable their supply chain can be."
Vinod Singhal, professor of operations management at Georgia Tech College of Management, told Continuity Forum that hitches in the supply chain can have severe ramifications for businesses.
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