Resilinc’s EventWatchAI platform reports a significant increase in supply chain disruptions in the first half of 2024, with a 30% rise compared to the same period last year. The Life Sciences, Healthcare, General Manufacturing, High-Tech, and Automotive sectors are the most affected.
Emerging Compliance and ESG Risk Areas on the Rise
Resilinc’s data reveals a decrease in disruptions in traditionally high-risk areas such as factory fires, which saw a 21% drop. However, emerging compliance and ESG risk areas witnessed substantial year-on-year increases. Regulatory Changes saw a staggering 185% jump, Fines rose by 82%, Legal Action increased by 43%, and Labor Violations soared by 144%. These increases are largely attributed to new ESG legislation introduced in 2024, including the German Supply Chain Due Diligence Act, Canada’s Modern Slavery Act, EU Corporate Sustainability Reporting Directive, EU Deforestation Regulation, and new PFAS regulations.
Financial and Organizational Risk Areas Experience Escalations
While Business Sales and Profit Warnings saw only a modest increase, other financial and organizational risk areas experienced significant year-on-year escalations. Bankruptcies surged 200%, Force Majeures increased 128%, and Leadership Transitions rose by 92%. Economic pressures such as high-interest rates, inflation, shifting consumer demand, increased operating costs, and supply chain disruptions are likely contributing factors.
Labor Disruptions and Extreme Weather Events Continue to Grow
Labor disruptions continued to rise for the second consecutive year, up 42%. Protests/Riots saw a dramatic 421% increase in the first half of this year. Labor unrest in countries like France, the Philippines, South Korea, and Indonesia reflects discontent over economic conditions, labor rights, and government policies.
Extreme weather events also continue to grow in frequency and severity, with the number of notifications jumping nearly 130% over H1 of last year. Specific weather event types like Flooding increased by 220%, Forest Fires rose by 48%, and Tornadoes jumped 94%. As the hurricane season continues, Resilinc has already recorded the highest number of notifications for Hurricanes/Typhoons (63 alerts) in H1 of this year—a 37% increase over last year and a staggering 425% jump from H1 2019.
WarRooms: A Key Tool in Managing Disruptions
Of the reported disruptions, over half (58%) were impactful enough to trigger the creation of a WarRoom. These virtual platforms, created in the Resilinc dashboard, are used when events have a high potential to disrupt customers’ supply chain operations.
