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Supply Chain Disruptions Take Toll on Clean Tech's Bottom Line

Dec. 23, 2015
Nearly two-thirds (61%) of clean tech companies experienced a supply chain disruption in the past three years.

Nearly two-thirds (61%) of clean tech companies experienced a supply chain disruption in the past three years, and in the vast majority of cases (84%) the event had a material impact on the bottom line, according to the 2015 Global Cleantech Risk Survey.  

Seventy-five percent of the firms that source products from China had a supply chain disruption.

Conducted by the Chubb Group of Insurance Companies and Cleantech Group, the online survey of 300 clean tech executives worldwide also found that supply chain disruptions resulted in delayed deliveries (69%), erosion of profit margins (28%), brand/reputation damage (27%) and reduced revenue (26%).

"As our survey confirmed, clean tech companies continue to innovate and expand their global footprint to grow sales, reduce expenses and achieve other benefits – but sometimes without fully appreciating the potential risks," said Sheeraz Haji, CEO, Cleantech Group. 

Eighty percent of survey respondents either source or sell products in at least one country beyond their homeland; nearly one-half (40%) of them are doing so.

"Operating beyond borders can be tricky," noted Amy Ingram,worldwide clean tech manager for Chubb. "Clean tech companies should consider implementing greater measures to mitigate their vulnerability to supply chain disruptions."

Although clean tech companies employ a variety of supply chain risk mitigation practices, they put some of the best practices in place only infrequently.

Only 23% track product shipments and even fewer purchase insurance (11%) and ensure that suppliers have business interruption plans (11%). In addition, 70% of clean tech companies do not have a written supply chain disruption plan.

Material Handling & Logistics is an IndustryWeek companion site within Penton's Manufacturing & Supply Chain Group.

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