Resilinc’s supply chain disruption data for Q1 2023 is here — while overall disruptions are leveling off, there are some new risk types experiencing major shifts.
Resilinc’s 24/7 risk monitoring platform EventWatchAI reported 3,821 total disruptions and alerts across all industries and risk events monitored by Resilinc: up 8% QoQ. Out of those disruptions, four major risk areas emerged: financial risks, labor risks, shortages, and recalls. To stay ahead of potential risks for your supply chain, read on to see the numbers and learn why these disruptions are happening.
Financial Risks on the Rise
Financial risk was a big story in Q1 – much of it stemming from economic instability, inflation, and the headline-generating Silicon Valley Bank collapse. Resilinc data shows a 55% jump in alerts about bankruptcies from Q4 2022 to Q1 2023 and a 90% increase in corporate restructuring alerts. These financial risk data points swelled even larger when compared year-over-year.
Alerts about bankruptcies surged 240% and corporate restructuring events rose 135%. Noteworthy companies that have filed for bankruptcy include Avaya Inc. (with assets valued at over $1billion), Sorrento Therapeutics Inc. (with assets valued at over $1billion), and NBGHome (with assets valued at nearly $740 million.)
To learn more about the global financial crisis, check out Resilinc’s Special Report: Global Financial Crisis and Mass Layoff — Top Risks to Your Supply Chain.
Labor and Transportation Disruptions are Up
Resilinc data shows labor disruptions were up 107% year-over-year. Labor disruptions include strikes (such as company/site level strikes, national strikes, transportation strikes, airport strikes, union contracts and strikes, cargo strikes, border authorities strikes, and postal services strikes), as well as layoffs, labor walkouts, and labor protests.
Faced with inflation, layoffs, and long hours, transportation employees are taking action in the form of strikes and protests. Airport disruptions are up 86% QoQ — largely due to these labor strikes and worker shortages. In recent weeks, airport strikes have hit France, Portugal, Britain, and Germany causing major delays. On February 17, more than 1300 flights were canceled by Lufthansa Group in Germany due to strikes. Learn more about the state of global transportation in Resilinc’s Special Report: Global Transportation Disruptions and 2023 Supply Chain Outlook.
Factory disruptions saw a 17% boost QoQ; labor shortages, strikes, falling consumer demand, and energy crises in both Asia and Europe all played a role. Additionally, extreme weather has impacted both airport disruptions and factory disruptions—causing delays in transportation and operations. From tornadoes to floods, extreme weather events trended up in Q1 2023 with a 61% gain from Q4.
Shortages and Recalls Continue
After experiencing decreases for most of last year, alerts for Supply Shortages are up again, increasing 38% QoQ. Many of these supply shortages stem from power shortages, raw material shortages, drug APIs, semiconductor part shortages, and manufacturing issues. Drug shortages, in particular, wreaked a lot of havoc: in March, the US Senate published the report The Health and National Security Risks of Drug Shortages. According to the report, shortages experienced a record five-year high of 295 active drug shortages at the end of 2022.
Alongside supply shortages, recalls saw a 23% quarterly increase and a 114% jump YoY. Key industries impacted by the 216 reported recalls are BioPharma, Life Sciences, Healthcare, Automotive, Freight, and Transportation. These recalls and drug shortages have contributed to FDA/EMA/OSHA Action trending up 69% over the quarter. Other causes include reports of unsafe working conditions, inspection citations, and safety violations.
Looking Forward and Planning Ahead
Two years ago, human health-related disruptions were off the charts due to Covid-19; last year port disruptions experienced major YoY increases and were top of mind — so far this year, alerts for both these risk areas are significantly down. In supply chain, risk areas shift around, and the target is always moving. This is simply the nature of the supply chain landscape. And, while the risk type may change, risk will always be there in some form, as one risk area replaces another.
It is important to remember that supply chain risk will always exist — as shown in Resilinc’s Q1 2023 data. Businesses must stay vigilant and plan ahead to respond quickly and effectively to ever-changing disruptions and risks. Using Resilinc’s EventWatchAI 24/7 supply chain disruption monitoring system, companies can ensure they have the latest data, in order to make timely, informed decisions.
EventWatchAI scans over 100M sources and sites for worldwide potential disruptions, identifying impacts in over 100 languages, 200 countries, and 50 event types. Customers are then sent tailored alerts and suggestions for actions specific to their businesses.
