Highlighting the importance of risk assessment procedures, disruptions associated with technological risks were the leading cause of supply disruptions in 2012, according to Property Casualty 360.
The report, Tomorrow Never Knows: Emerging Risks, revealed unplanned IT and telecommunication outages interrupted supply operations last year more than any other cause, including severe weather. Third-party service provider failure was the third leading cause.
A simple disruption to power supply among manufacturers and other industries that rely on technology to manage their business operations could pose a significant risk. While a simple power outage could result in interruptions to days or weeks of production, some technology failures are cause by cyberattacks that could result in data breaches or losses.
The report notes that cyberattacks are on the rise, with 2012 breaking the record with respect to the number of reported data-loss incidents. Incidents of malicious cyberactivity reached 2,644 from 2012 to mid-January of 2013, more than double compared to 2011, which was also a record-breaking year. This number is higher accounting for reported incidents that did not specify the amount of records that were compromised.
"Few aspects of our personal or commercial lives are now technology free," the report said. "And yet, most individuals and businesses only realize the extent of this dependency when they are negatively affected by a technology-driven or technology-dependent event."
Reduce logistics risks with advanced technology and software
With tech-related disruptions expected to increase, UPS said companies can utilize advanced tools as part of their risk management process, Forbes reported.
While using high-tech solutions to reduce the risk of a technological disruption seems counterintuitive, companies could benefit from using predictive modeling software to plan for worst case scenarios. To help with logistics on their end-to-end business processes, companies can use product lifestyle management to view data that will help them make improved decisions.