Small businesses underestimate resilience of supply chain

Small businesses underestimate resilience of supply chain | Insurance Business

Small businesses underestimate resilience of supply chain
There is a shortfall in small companies buying business insurance, because they are seriously underestimating the resilience of their supply chain. North American SMEs, perhaps mistakenly, believe they are well placed to recover in the event of a loss of their main supplier, according to research published by Zurich Insurance Group this week.
The research was part of an international survey, which found that globally, SMEs believe they are well positioned to manage supplier interruption with 55% claiming that the loss of their most important supplier would not influence their day-to-day business.
In fact, only 14% of SMEs globally see their business being significantly affected were they to lose their main supplier, while 39% acknowledge some level of risk.
But this suggests that small businesses might not have full visibility of their supply chains and may therefore be underestimating the risk.
Nick Wildgoose, global supply chain product leader at Zurich, said there are high levels of supply disruption, with seven out of ten organizations admitting to not having visibility over their full supply chain, and half of disruptions occuring below the first level of supplier. “This makes us believe that SMEs probably underestimate their supply chains risk exposure, and we urge them to reassess this,” he said.
There is a significant market of SMEs that recognize the risk however. In the US, 13% of respondents acknowledged that they would have to significantly downsize and review business plans in the event of a disruption. While 5.5% said they would need emergency financial support to keep going. Only 1% would face closure of their business.