Factory Fires top reason behind Supply Chain Disruptions in 2020: Resilinc Report

factory fires

Among the major reasons behind supply chain disruptions in 2020, factory fires emerged as the top reason among all other factors- as noted by Resilinc’s 2020 Annual EventWatch Report.

According to data released by Resilinc’s Report, factory fires, mergers & acquisitions, business sales, factory disruptions, and human health ranked as the top 5 supply chain disruptions in 2020.

Resilinc – a leading supply chain risk monitoring and mapping solution – also states how supply chain disruptions have gone up 67% year-over-year, with 83% of disruptive events being human caused, in its report.

EventWatch sent alerts on nearly 1,000 factory fires in 2020,of which about 200 factory fires were powerful enough to lead to the creation of what the company refers to as WarRoom- virtual platforms in the Resilinc dashboard where customers and their suppliers communicate and collaborate to assess and resolve disruptions.

The report, issued on April 22, cited a fire in July at a Nittobo plant in Sakurashimo, Fukushima, Japan, which led to disruptions in supplies of fiberglass to ABF substrate producers, which in turn caused delays at manufacturers of high-end servers, networking chips, and CPUs. 

Another fire, also in Japan broke out on the supplies of advanced sensing devices used in automotive and other industries. Both these events intensified the massive shortage of semiconductors that will cost the automotive industry as much as $61 billion in lost sales this year.     

The report also reveals supply chain disruptions were up 67% year-over-year, with 83% of disruptive events being human-caused.

While human health disruptions – which include COVID-19 related events – stood fifth in terms of the number of event alerts (Resilinc sent out 453 alerts regarding human-health related disruptions), the disruption caused by pandemic was more damaging than any other event type.

COVID-19 and the government policies enacted in response to it, created deeper global impacts, leading Resilinc to designate the event as “severe” – the first time in the company’s history ranking an event at that level of impact. 

In total in 2020, Resilinc sent out 6,192 alerts about potential supply chain disruptions to its customers – which comprise of the largest multinational organisations today- marking a 67% increase over 2019. Of these potential disruptions, 3,727, or 60%, were impactful enough to trigger the creation of a WarRoom.

For the third year in a row, the two top events were factory fires and changes in ownership of supplier firms.

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