External threats to supply chains have received considerable attention following wellpublicized natural disasters, terrorist action, piracy and, of course, cyber-attacks. However, understanding of the impacts of these risks is at a very early stage. One survey, undertaken for the World Economic Forum, found that 30 per cent of respondents estimated losses of 5 per cent of annual revenue from supply chain disruption. However, over a quarter of respondents were not able to place any sort of figure on the financial impact.
It can be argued that the risks themselves have not become any more acute. After all there have always been wars and natural disasters. Rather it is the evolving supply chain and production strategies of the major global manufacturers which have become more vulnerable, dependent on virtual manufacturing networks of suppliers, distributed around the world.
It is possible to divide external threats into five main categories, each of which is dealt with in detail within this whitepaper.