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Blue chip ‘laggers’ to lose out in global supply wars
Aon & State of Flux launch supply chain survey
London
NYSE: AOC

LONDON, 23 June 2008 - Despite the increasing cost and scarcity of raw materials, some 45% of organisations are failing to assess and manage risks in their supply chain, according to research by Aon and State of Flux in their "Risks in 21st Century Supply Chains" report. This is leading to a new breed of 21st century "laggers" among international blue chip companies who could face the disastrous consequences of supply chain disruption in 2008.

Irrespective of industry sector, the expansion of global supply chains and increasing competition for supply is forcing organisations to try and secure raw materials elsewhere to fulfil customer demand. For example, as we begin to see the supply of grain diverting from existing customers to the highest bidder, namely China, customers will need to arrange multiple sources and work on scenario planning around the failure of the supply chain.

However, the survey results indicate that not enough is being done to tackle these risks. Key findings include:

* only 27% stated that managing supply chain risk is a priority area of focus for 2008;
* some 55% of organisations believe they are currently managing and assessing risk in their supply chains;
* only 43% of respondents stated that their supply chain and risk management functions work partially together to manage risk;
* the top 3 strategies for responding to supply chain disruption are dual sourcing, risk acceptance and shared plans with suppliers - but 14% have no strategy;
* the majority of the respondents (53%) use an internal function as the principal source of intelligence on inherent risk in the supply chain. The media is used by 10% of respondents.

To read the release in its entirety and to access the report, visit: http://aon.mediaroom.com/index.php?s=65&item=239.
 

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