When it comes to global supply chain disruptions, it’s almost easier to list events that didn’t happen over the past year. In the first half of 2022, disruptions were up an “astounding” 46 percent year-over-year (YoY), according to Resilinc, a supply chain risk consultancy. That’s 7,929 events.
Resilinc monitors global supply chain events through its EventWatchAI platform.
The top five reported disruptions were:
- Factory fires
- Mergers & acquisitions
- Business sales
- Leadership transition
- Factory disruptions
Factory fires ranked as the number one disruption for the first half of the year with the number of fires up 131 percent YoY. Electronics companies fared better in 2022 than in 2021 in this regard. Component and labor shortages, extreme weather and power outages are among the electronics industry’s biggest facility headaches.
This year is on track to have the most factory fires ever reported, said Resilinc, a trend driven by gaps in regulatory and process execution as well as a shortage of skilled labor. Low staff levels mean routine maintenance may be deferred, and training is required to operate much of the technology used in factory and warehouse automation.
Overall, the high-tech sector saw the biggest spike in disruptions — up 60 percent YoY. The life sciences and healthcare industries each saw a 51 percent increase in events; aerospace disruptions grew 58 percent and auto companies suffered a 49 percent spike. The global shortage of semiconductors has impacted businesses across many industry sectors, including electronics manufacturing.
The Resilinc data also reveals that disruptions due to geopolitical events, most notably the Russia-Ukraine war, were up 521 percent YoY. As sanctions are implemented and production shuts down, the supply chain is experiencing unprecedented commodity and raw material shortages. These will likely continue through the end of the year, the firm noted.
Neon, widely used by the electronics industry, is largely sourced from Ukraine. China’s zero-Covid policy limited shipments to and from that region earlier this year.
Geographically, North America experienced the most disruptions in the first half—a total of 3,322 events — accounting for over 40 percent of the total alerts issued in the first six months of this year. Europe’s total was 2,163 and Asia, 1,054.
The backlog of ships at West Coast seaports has been on ongoing problem for the Americas supply chain. Labor shortages also continue to dog U.S. manufacturing companies, according to the Institute for Supply Management.
As of July 26, trucker protests in Oakland, CA, were no longer impacting port operations but congestion at inland rail hubs were creating a container backlog in LA/Long Beach, according to cargo marketplace Frieghtos. A buildup of empty containers was slowing operations on the East Coast.
Supply chain experts continue to emphasize the importance of visibility in mitigating disruption. Both systems and partners can provide relevant data. “If I look at what we bring to the table, it’s all about reliability, time, place and utility and from a location perspective we are a truly connected global ecosystem,” said Peggy Carrieres, vice president for global sales enablement and supplier development at electronics distributor Avnet Inc. “We have that capability — it’s all about early risk warning and mitigation.”
Distributors gather data from hundreds of component brands.
To ensure supply chain resiliency, companies need to be able to detect disruptions promptly, understand the impact, and act quickly, said Sumit Vakil, chief product officer and co-founder of Resilinc. “Through the power of reinforced learning, the AI continues to get smarter as it processes a continually increasing volume of news.”
When this type of monitoring is layered with multi-tier supply chain mapping, customers have visibility into where a disruption is occurring and the impact it will have across the entire network — from parts and raw materials to the customers’ customers, he added. “Our technology can even predict if a purchase order is going to be late, and by how long, and propose a risk-mitigation action plan.”