Research shows that supply chain integrity directly linked to share value
A recent study by international law firm Freshfields Bruckhaus and Deringer shows that operational crises have the greatest long term negative impact on the share price of companies. However, according to consultants KPMG, half of companies are also said to have no risk mitigation strategy in place and are unaware of the critical role played by their supply chain. The findings demonstrate the benefits of supply chain integrity and the reputational and financial implications of not safeguarding these operations.
“Evolution Time Critical’s expertise has enabled its clients to protect their share price by evaluating existing processes to identify and then manage potentially volatile operations in their supply chain,” says Evolution Time Critical managing director, Brad Brennan. “Most companies are now aware of the short-term financial implications of supply chain failure. They next need to look at the long-term lasting damage that can be done to reputation and brand integrity, which is crucial for automotive OEMs in particular.”
The importance of visible supply chain connectivity is becoming widely acknowledged, with an increased awareness globally. According to a survey of risk professionals carried out by Marsh & McLennan, 73% of North American companies say their supply chain risk has increased since 2005, and 71% state that the financial impact of this risk has also risen. “This type of informal or inconsistent risk management can lead to interdependencies in the supply chain. Where this happens we are able to advise companies and provide structure to reduce risk and mitigate the damage caused by unforeseen circumstances,” says Brennan.
Ensuring the integrity of supply chains provides a means of optimising processes and profits. As automotive manufacturers’ understanding of the critical role played by robust logistics grows, supply chain efficiency and visibility beyond Tier 1 suppliers becomes integral to future strategy and growth.
“We are seeing a clear supply chain strategy being adopted at senior management and chief executive level,” says Brennan. “The optimisation and integrity of logistics is no longer just a problem for logistics managers and suppliers to overcome, but is seen as a vital tool in business development, and the growth and safeguarding of share prices.”