Executive Briefings

Supply Chain Managers Concerned About Climate-Induced Business Disruptions

The semiconductor and electronics industries have learned in the most difficult manner in the past few years how damaging business disruptions due to weather can be.

In Smith & Associates' annual survey of the global supply chain, respondents clearly voiced their concerns around the potential impact on their business from climate-induced disruptions. Delving further into the issue of environmental impact on the supply chain, respondents also provided feedback on a set of corporate sustainability activities.

The semiconductor and electronics industry has long recognized that these types of unforeseen weather events can cause significant disruptions – often leading to solution services from independent distributors to mitigate the impact of the disruption. Having only recently emerged from the last of the long-running after-effects of the 2011 Thailand devastating flooding, the impact of climate-induced disruptions cannot be prevented, but with attention to environmental sustainability, we may be able to alleviate some of the severity over time.

Among the survey respondents, contract manufacturers stand out as the leading company category to evaluate climate induced natural disruptions as an extremely likely scenario (37.50 percent), with an overall likelihood rating of 62.5 percent. CMs are followed by electronic manufacturing service providers who rate the overall likelihood (as opposed to extremely likely) of such a disruption affecting their business at a 65 percent likelihood rate followed by original equipment manufacturers at a 62.5 percent likelihood.

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In Smith & Associates' annual survey of the global supply chain, respondents clearly voiced their concerns around the potential impact on their business from climate-induced disruptions. Delving further into the issue of environmental impact on the supply chain, respondents also provided feedback on a set of corporate sustainability activities.

The semiconductor and electronics industry has long recognized that these types of unforeseen weather events can cause significant disruptions – often leading to solution services from independent distributors to mitigate the impact of the disruption. Having only recently emerged from the last of the long-running after-effects of the 2011 Thailand devastating flooding, the impact of climate-induced disruptions cannot be prevented, but with attention to environmental sustainability, we may be able to alleviate some of the severity over time.

Among the survey respondents, contract manufacturers stand out as the leading company category to evaluate climate induced natural disruptions as an extremely likely scenario (37.50 percent), with an overall likelihood rating of 62.5 percent. CMs are followed by electronic manufacturing service providers who rate the overall likelihood (as opposed to extremely likely) of such a disruption affecting their business at a 65 percent likelihood rate followed by original equipment manufacturers at a 62.5 percent likelihood.

Read Full Article