Supply chain labour disruptions way up this year

A new study of supply chain disruptions has found that global labour disruptions to supply chain operations have climbed by over 130 percent this year.

According to data from Resilinc covering the first half of 2023, labour disruptions are substantially higher this year, up by 136 percent. This includes company and site-level strikes, national strikes (like the strikes in France or the worker walkouts at Starbucks in the U.S.), layoffs (like this year’s job cuts at Google, PayPal, Meta, and Amazon), and labour protests, among others.

From January through June, Resilinc’s EventWatchAI platform reported a total of 8,197 supply chain disruptions, with the healthcare, high tech, automotive, aerospace, and food and beverage industries bearing the brunt of the impact.

However, the overall number of disruptions is slowing compared to previous years, with a three percent year-over-year increase, indicating the supply chain is stabilizing.

The top ten reported disruptions in the first half of 2023 included: factory fires; mergers and acquisitions; business sale; leadership transition; factory disruption; legal action; labour disruption; cyberattack; port disruption; and, recalls.

While the number of disruptions overall is stabilizing and even notably decreasing in some historically high-risk areas like factory fires, other emerging financial risk areas experienced substantial year-over-year increases. Bankruptcies surged by 196 percent, profit warnings by 300 percent, and corporate restructuring by 125 percent.

Factory disruptions, including shutdowns, production halts, warnings/citations, and labour accidents, increased by 30 percent year-over-year. FDA/EMA/OSHA Action saw an 82 percent jump, while recalls surged by 66 percent compared to the first half of 2022.

Financial and organizational risks such as mergers and acquisitions, business sale, and leadership transition remained among the top five disruptions, but displayed signs of stabilization and slight deceleration compared to the first half of 2022.

Factory fires, although still the leading supply chain disruption with 1,642 notifications in the first half of 2023, experienced a nearly 20 percent decline year-over-year. This reduction can be attributed to the restoration of proper maintenance and procedures following the COVID-19 pandemic, as well as a decrease in production due to shifting consumer demands.

Of these reported disruptions, over half (53 percent) were impactful enough to trigger the creation of a WarRoom (virtual platforms in the Resilinc dashboard where customers and their suppliers communicate and collaborate to assess and resolve disruptions).

Resilinc’s data is gathered by its 24/7 global event-monitoring artificial intelligence, EventWatchAI, which collects information and monitors news on 400 different types of disruptions across 104 million sources including traditional news sources, social media platforms, wire services, videos, and government reports. Annually, the AI contextualizes and analyzes nearly five billion data feeds across 100 languages and 200 countries.