Author: Java Programmer Team

Monitoring tools are the eyes and ears of the DevOps team for getting Full Stack Visibility into IT Services, and choosing the right DevOps monitoring tool can make all the difference for efficient workflows and happier end-users.

Different Types of DevOps Monitoring tools based on what to monitor

The usual monitoring tools for most DevOps teams are classified into four categories (but is not limited to):

• Infrastructure Monitoring
• Network Monitoring (NPM)
• Application performance monitoring (APM)
• Log analysis tool

Let’s dive into each layer and see where they fit in your DevOps monitoring process.

Infrastructure Monitoring

These tools can monitor the entire infrastructure including Bare metal servers, Virtual Machine, Kubernetes cluster. Infrastructure monitoring tools help identify and resolve IT infrastructure problems before they affect critical business processes. They can help you plan for upgrades before outdated systems begin to cause failures. Infrastructure monitoring tools also make sure maintenance outages have a minimal impact on users.

By monitoring the health of the infrastructure, you can get a sense of the health of the applications running on it. However, these tools don’t monitor the application as a complete set of services. In that sense, they take a traditional approach to monitoring that isn’t best suited for today’s cloud based applications.

Example of Infrastructure Monitoring : Nagios, Zabbix

Network Monitoring Or Network Performance Monitoring

Network monitoring is a critical component of the connected organizations, these tools provide a holistic view of how networks (including corporate on-premises, cloud, multi cloud, hybrid and other networks) are performing. Data sources include: Network-device-generated traffic data Raw network packets Network-device-generated health metrics and events NPM tools provide diagnostic workflows and forensic data to identify the root causes of performance degradations in order to maintain infrastructure health and help identify vulnerabilities across a system’s environment. Network monitoring systems are capable of detecting and reporting failures of network connections, Devices (Switches, routers) among others. 

Example of Infrastructure Monitoring : Solar Winds, Manage Engine

Application Performance Monitoring

Application performance monitoring tools, as the name suggests, monitor your application’s performance. They provide visibility into the behavior of your application, detect problems that impact users, and help rapidly resolve those issues. They monitor end-to-end application flow and provide traces that include code level details. APM tools contain deep diagnostics that help you find the exact line of code that may be causing a performance slowdown or failure.

While APM tools help improve performance and prevent latency and downtime, there are many issues that require deeper troubleshooting than APM can provide. These issues require indexing and searching of log files. Unfortunately, APM tools do not analyze log files and are unable to detect security attacks. You need a log analysis tool for this kind of analysis.

Example: New Relic, AppDynamics

Log Analysis

Log analysis tools provide a scalable, reliable way to store and index your log files. They can search through files quickly, create detailed analytics based on the log data, and monitor for security violations and cyber-attacks based on the log file. However, they do not provide end-to-end application performance monitoring and are unable to reveal code level traces

Example: Splunk, Elastic Stack

As you can see each category of these tools are specialized in monitoring specific metrics only, as a Devops personnel If you rely on any one of these tools alone when an incident occurs, you’ll always miss some key piece for the resolution. That’s the main challenge for Devops teams.

Solutions like Zapoj IT Event Management are leveraged by organizations to centralize and aggregate all the events and alerts that are generated from all the tools in the IT portfolio, to triage and orchestrate better response to incidents in real-time.

 

The proliferation of risks like cyber attacks, geopolitical threats, supply chain disruptions and more has made the job of security and risk management leaders more challenging than ever. That’s why more organizations are building or optimizing their security operations center (SOC) to improve threat visibility and their overall enterprise resilience posture.

We at Zapoj believe that, in order to have a successful, modern SOC, businesses need to equip themselves with insightful best practices and recommendations to avoid the common pitfalls. Here, I’ll highlight five tips that can help your organization build a better SOC—and thus stronger business resiliency.

1. Lack of Executive sponsorship with clear vision and strategy

The first pitfall organizations may run into is having a lack of clearly defined vision and strategy, or a gap in executive sponsorship. Risk management needs to be hard-coded into the DNA of your organization, and buy-in and active advocacy from your senior leadership is critical to success.

It’s crucial for C-suite executives to understand risk, risk mitigation and the likelihood of their organization’s exposure to risk. Then, ensure your leadership and security teams make your SOC the central hub that manages the related challenges your company is facing. The good news is that, as more executives become aware of the evolving risk landscape and its impact on enterprise resilience, security leaders can expect to see more support for their strategy going forward.

 

2. Scope your security program

When setting up a SOC, security leaders and teams need to determine and agree on their goals. What is your organization trying to achieve and what are you safeguarding? A clear understanding of the problems you are tasked with solving is essential—whether it’s legal and compliance risks, or cyber and physical asset protection. A scope that is too narrow or too broad often leads to an ineffective security program.

By identifying the right enterprise risk management framework that meets your organization’s needs, you can more easily define roles and responsibilities, and then figure out how best to protect your people and assets.

Key Roles to Consider:

1. SOC manager
2. Alert analyst
3. Incident responder
4. Subject matter expert

Download Ebook on Guide to Operating a security operation center.

3. Set clear objectives and ways to measure them

Once you’ve established your vision and scope of responsibility, it’s time to set clear objectives and metrics to measure them. Because it’s difficult to measure the value of incidents that were avoided, it can be challenging to find the right metrics within security. Don’t give up. Focus on measuring and quantifying your prevention efforts.

 

 

You can also measure your operational efficiency by honing your ability to process vast amounts of data at scale. Other key performance indicators include:

• Average incident response time, including:

Mean time to detect Mean time to acknowledge Volume and frequency of risk events Mean time to resolution

• Total number of incidents, including:

Volume and frequency of risk events that turn into incidents Volume of unactionable Risk events.

• Escalation ratio, including:

Percentage of alerts escalated for action Percentage of incidents resolved in a defined timeframe
And, you can measure cost reductions realized by saving time and manpower and streamlining or fully automating processes.

4. Prioritize technology that enables Real time Risk Intelligence

While the speed at which information spreads is increasing exponentially, many security operations remain people- and process-heavy, making it harder to keep track of every single incident or emerging risk. Additionally, the convergence of cyber and physical risks will likely continue to rise, so your SOC should have access to critical real-time data that provides a holistic view of the risk landscape. Therefore, ensure your tech stack includes end to end Critical Event Management solutions like Zapoj CEM for Business Operations, which enables Risk, security and continuity teams to identify potential threats and crises as soon as they occur and respond to them.

5. Eliminate silos and Encourage Information sharing across the organization

The security industry—both in the private and public sector—has long seen the value of collaboration and information sharing. However, some organizations may not have the right technology and processes to do so effectively.

 

 

When creating and/or optimizing a SOC, always set out to have tools and practices that enable cross-functional cooperation, including the sharing of information about risks that are relevant to the entire organization. By leveraging Zapoj  Emergency Mass Notifications, which enable teams to work cross-functionally in real time, you can easily design a clear process for when and how to communicate important information and which stakeholders should receive it. This will help you manage incidents more effectively and ensure the highest level of protection possible.

 

Devops is not just a technology, it’s also changing our work processes and culture. The “war room” is a traditional method of problem solving across different functional teams. What was once a physical location has now gone virtual, using ChatOps and collaboration platforms.

When a major incident occurs, many teams prefer to gather all subject matter experts (SMEs) to resolve the problem as quickly as possible. Having everyone in the same space can decrease the chances of lapses in communication or delays in coordination.

Before the rise of remote work, many teams had physical war rooms within their offices. These were conference rooms that were purposefully arranged and stocked for major incidents. However, as many organizations shift to distributed teams, this version of the war room is becoming less common. Instead, virtual war rooms are how many teams now communicate during response.

Benefits of an Virtual war rooms

As Agile methodology became a commonly adopted method of working, organizations began using war rooms regularly. This makes sense, as Agile touts the importance of understanding and optimizing how humans interact with technology. Communication and adaptability are two of the most important parts of incident response, and ones that require humans to successfully execute. War rooms were created to enhance this. Here are some of the benefits of a war room, whether it’s physical or virtual:

• Everyone you need is right there: Major incidents usually involve multiple teams. War rooms bring together these disparate teams and provide the space and place for SMEs to work together rather than siloed.

• You can communicate and clarify quickly: Communication works both ways, and responders resolving complex problems will often have questions or suggestions. War rooms ensure there are no delays in communicating these.

• War rooms eliminate distractions: Normal work can be interrupted if necessary. Teammates and coworkers can drop by your desk or ask you to jump on a call. But these asks are almost never as urgent as the major incident. War rooms ensure that responders are able to work as free from distractions as possible. For everyone outside the war room, it’s a clear sign to leave the responders to their work.

• As the incident changes shape, you can adapt: As an incident progresses, it can change shape, scope, teams, and more. Rarely are major incidents straightforward. With a war room, these changes can be communicated quickly and the team can formulate a new plan of action within minutes rather than playing a game of telephone where crucial information is lost.

• Stakeholders remain informed without interrupting the process: Stakeholders are people who may not actively be involved in resolving the issue, but who need to know what’s going on to coordinate with other parts of the business. With a war room, responders can regularly update these stakeholders without needing to track individuals down. Additionally, stakeholders know where to go for information and are less likely to interrupt the response process asking for updates if the updates are already being provided regularly.

 

Best practices for virtual war rooms

• Create backup communication methods. In the event that an incident causes your primary communication method to fall through, you need to be prepared with a backup. This backup needs to be well known and documented so that all involved parties can participate without scrambling to find the right video conferencing link or sending multiple emails.

• Familiarize everyone with the tools you use. If you use a tool or platform to manage incident response, do all teams know how to use it? Train relevant teams ahead of time so nobody has to learn a new tool during an incident.

• Have well-established communication guidelines. What you use to communicate is important, but understanding how you communicate is just as crucial. Make sure you document how teams are expected to collaborate. Are separate direct messages okay, or should you share any thoughts you have with the team via the video conference? Are stakeholders updated via email or messaging tool, or should they drop into the virtual war room at a certain time each hour? Setting these standards ahead of time will prevent confusion.

 

Supply chain disruptions can happen at any time and can have a significant impact on a
business’s bottom line. To minimize the impact of disruptions and protect their bottom line,
businesses must take a proactive approach to identifying potential risks and developing a plan
to respond to them. One of the most important steps in this process is conducting a risk
assessment for supply chain disruptions.

Risk Assessment Steps

A supply chain risk assessment is the process of identifying potential vulnerabilities in the
supply chain and evaluating the potential impact of a disruption. The goal of a risk assessment
is to identify areas of the supply chain that are most at risk and develop a plan to minimize the
impact of a disruption.

To conduct a risk assessment, businesses should follow these steps:

1. Identify potential risks: The first step in conducting a risk assessment is to identify
   potential risks. This can include internal risks such as equipment failure or labor strikes,
   as well as external risks such as natural disasters or supplier issues.
2. Evaluate the potential impact: Once potential risks have been identified, businesses
   must evaluate the potential impact of a disruption. This can include assessing the
   potential impact on production, revenue, and reputation.
3. Assess the likelihood of a disruption: Businesses must also assess the likelihood of a
   disruption occurring. This can be done by analyzing historical data, industry trends, and other factors that can contribute to a disruption.
4. Prioritize risks: After assessing the potential impact and likelihood of a disruption,
   businesses must prioritize the risks. This can be done by identifying the risks that are
   most likely to occur and have the greatest potential impact.
5. Develop a plan: Once risks have been identified and prioritized, businesses must develop
   a plan to respond to them. This can include developing contingency plans, business
   continuity plans, and procedures for restoring normal operations.
6. Continuously Monitor and update the plan: Supply Chain risks are continuously
   changing. It’s important to regularly review and update the risk assessment and the plan
   to adapt to the changing environment.

By conducting a risk assessment and developing a plan to respond to disruptions, businesses can minimize the impact of disruptions and protect their bottom line. Additionally, businessescan leverage new technologies such as AI and big data to improve their risk assessmentprocess and quickly identify and respond to disruptions.

Conclusion

In conclusion, risk assessment for supply chain disruptions is an essential step for businesses
to minimize the impact of disruptions and protect their bottom line. By following the above
steps, businesses can identify potential risks, evaluate the potential impact, prioritize risks, and
develop a plan to respond to them. By continuously monitoring and updating the plan,
businesses can adapt to the changing environment and build a resilient supply chain.

Introduction

Supply Chain Resilience is the ability of a business to anticipate, prepare for, and respond to disruptions in the supply chain. In today’s fast-paced business environment, supply chain disruptions can happen at any time and can have a significant impact on a business’s bottom line. To minimize the impact of disruptions and protect their bottom line, businesses must take a proactive approach to building resilient supply chains.

Classification of Supply Chain Disruptions

To understand the basics of supply chain resilience, it is important to first understand the different types of supply chain disruptions. Disruptions can be categorized into three main types:

1. Internal : Internal disruptions are caused by problems within the organization such as equipment failure or labor strikes.
2. External : External disruptions are caused by problems outside of the organization such as natural disasters or supplier issues.
3. Systemic: Systemic disruptions are caused by problems that affect the entire supply chain such as a global pandemic.

Four Pillars of Supply Chain Resilience

To build a resilient supply chain, businesses must take a holistic approach that addresses all three types of disruptions. This approach should include the following four key elements:

1. Risk Assessment: To prepare for disruptions, businesses must first identify potential risks. This can be done by conducting a risk assessment that looks at the entire supply chain and identifies potential vulnerabilities.
2. Contingency Planning: Once potential risks have been identified, businesses must develop a contingency plan to respond to disruptions. This plan should include procedures for identifying and responding to disruptions, as well as procedures for restoring normal operations.



3. Business Continuity Planning: Business continuity planning is an essential component of supply chain resilience. This plan should include procedures for maintaining critical operations during disruptions and procedures for restoring normal operations.
4. Supply Chain Visibility: To respond to disruptions quickly and effectively, businesses must have real-time visibility into their supply chain. This can be achieved by using technologies such as IoT and big data to track inventory, monitor supply chain operations, and quickly detect and respond to disruptions.

By implementing these four key elements, businesses can build a resilient supply chain that is better prepared to handle disruptions. Additionally, businesses can adopt some best practices to improve their supply chain resilience such as:

• Diversifying suppliers and suppliers’ locations
• Building inventory buffers
• Establishing partnerships with logistics providers
• Leveraging new technologies such as AI, big data and IoT
• Building a culture of resilience in the organization

Conclusion

In conclusion, supply chain resilience is essential for businesses to protect their bottom line and minimize the impact of disruptions. By understanding the basics of supply chain resilience and implementing the key elements and best practices, businesses can build a resilient supply chain that is better prepared to handle disruptions. It’s important to note that supply chain resilience is a continuous journey and organizations should regularly review and update their resilience plans to adapt to the changing business environment.

How to Minimize the Impact of Disruptions

Supply chain disruptions can happen at any time and can have a significant impact on a company’s operations and bottom line. To minimize the impact of disruptions and protect their bottom line, businesses must take a proactive approach to building resilient supply chains. One approach that companies can use to build a resilient supply chain is by implementing Critical Event Management (CEM).

How CEM helps achieve supply chain resilience

CEM is a process that helps organizations to anticipate, prepare for and respond to critical events such as supply chain disruptions. It is a holistic approach that involves the use of advanced technologies, such as AI and big data, to monitor and analyze supply chain operations in real-time, detect potential disruptions and respond quickly to minimize their impact.

There are several ways in which CEM can help companies implement supply chain resilience:

1. Real-time monitoring and analysis: CEM platforms use advanced technologies such as IoT and big data to monitor and analyze supply chain operations in real-time. This enables companies to quickly detect potential disruptions and respond to them before they have a significant impact.
2. Automated response: CEM platforms can be configured to automatically respond to disruptions, reducing the time it takes to respond and minimizing the impact of the disruption.
3. Predictive analytics: CEM platforms use predictive analytics to identify potential vulnerabilities in the supply chain and predict the potential impact of a disruption. This allows companies to proactively prepare for disruptions and minimize their impact.
4. Business continuity planning: CEM platforms provide businesses with the ability to maintain critical operations during disruptions and quickly restore normal operations.
5. Continuous improvement: CEM platforms provide real-time data that organizations can use to continuously improve their supply chain resilience.

By implementing CEM, companies can build a resilient supply chain that is better prepared to handle disruptions. Additionally, CEM can help companies to implement best practices such as diversifying suppliers, building inventory buffers, and establishing partnerships with logistics providers.

Conclusion

In conclusion, CEM is a powerful tool that can help companies to implement supply chain resilience. By providing real-time monitoring and analysis, automated response, predictive analytics, business continuity planning and continuous improvement, CEM can help companies to minimize the impact of disruptions and protect their bottom line. It’s important to note that implementing CEM is a continuous journey and organizations should regularly review and update their CEM plan to adapt to the changing business environment.

Introduction

Supply Chain Management (SCM) and Supply Chain Resilience are two related but distinct concepts that are critical to the success of any business. While both are important, they have different objectives and require different strategies and approaches. In this article, we will explore the difference between these two concepts and how they can be used to improve the overall performance of your supply chain.

Supply Chain Management

Supply Chain Management (SCM) refers to the coordination and management of activities involved in the movement of goods from suppliers to customers. It encompasses the planning, design, execution, control, and monitoring of supply chain activities with the goal

of creating value and achieving sustainable competitive advantage. SCM is a holistic approach that focuses on improving the efficiency and effectiveness of a supply chain. This includes activities such as sourcing, production, logistics, and distribution. By improving the efficiency of these activities, businesses can reduce costs, increase efficiency, and improve customer satisfaction.

 Supply Chain Resilience

on the other hand, Supply Chain Resilience (SCR) refers to the ability of a supply chain to anticipate, withstand, recover, and adapt to disruptions and unexpected events. It is the ability of a supply chain to maintain or quickly restore its normal operations in the face of unexpected events such as natural disasters, pandemics, cyber-attacks, and other types of disruptions.

Supply Chain Resilience is a proactive approach that focuses on minimizing the impact of disruptions on a supply chain. This includes activities such as risk assessment, incident response, and recovery planning. By improving the resilience of a supply chain, businesses can reduce the impact of disruptions, minimize downtime, and maintain the continuity of operations.

Difference between SCM and SCR

One key difference between SCM and Supply Chain Resilience is their focus. While SCM is focused on improving efficiency and effectiveness, Supply Chain Resilience is focused on minimizing the impact of

disruptions. This difference is reflected in the types of activities that are prioritized. SCM activities such as sourcing and production are focused on improving efficiency and reducing costs, while Supply Chain Resilience activities such as risk assessment and incident response are focused on minimizing the impact of disruptions.
Another difference is the time frame.

SCM is a long-term strategy that focuses on improving the efficiency and effectiveness of a supply chain over time. On the other hand, Supply Chain Resilience is a short-term strategy that focuses on minimizing the impact of disruptions in the immediate aftermath of an incident. Despite these differences, SCM and Supply Chain Resilience are not mutually exclusive.In fact, they are closely related and complementary. Improved supply chain visibility, for example, can help improve SCM by providing real-time information on inventory levels, production schedules, and logistics.

This, in turn, can help improve Supply Chain Resilience by providing early warning of potential disruptions, allowing businesses to take proactive measures to mitigate their impact.

Conclusion

In conclusion, Supply Chain Management and Supply Chain Resilience are two related but distinct concepts that are critical to the success of any business. While SCM is focused on improving efficiency and effectiveness, Supply Chain Resilience is focused on minimizing the impact of disruptions. Both concepts are important, and businesses should strive to implement strategies and approaches that improve both. By improving the efficiency of their supply chain operations and reducing the impact of disruptions, businesses can reduce costs, improve customer satisfaction, and maintain the continuity of operations.

Supply chain visibility is the ability to track and monitor the movement of goods from
suppliers to customers in real-time. This enables businesses to have a complete and
an accurate picture of their supply chain operations, including inventory levels, production
schedules, and logistics.
Improving supply chain visibility can improve supply chain resilience in several ways:

1. Early warning of disruptions: With improved visibility, businesses can detect
   potential disruptions early and take proactive measures to mitigate their impact.
   This can include rerouting shipments, finding alternative suppliers, or increasing
   inventory levels.
2. Faster incident response: Improved visibility allows businesses to quickly identify
   and respond to disruptions, minimizing the impact on operations and reducing
   downtime.
3. Better risk management: With improved visibility, businesses can identify and
   assess potential risks and take steps to mitigate them. This can include diversifying suppliers, implementing inventory management strategies, and
   developing contingency plans.
4. Improved supplier relationship management: By monitoring supplier
   performance, businesses can identify potential problems and take steps to
   address them before they become disruptions.
5. Increased efficiency: Improved visibility allows businesses to optimize their
   supply chain operations and reduce costs. This can include reducing inventory
   levels, improving production schedules, and streamlining logistics.

Overall, supply chain visibility is a key component of supply chain resilience, as it
enables businesses to better anticipate, respond to, and recover from disruptions.

Introduction

In today’s fast-paced and ever-changing business landscape, the ability to anticipate, withstand, recover, and adapt to unexpected events has never been more important. This is where supply chain resilience comes in. Supply chain resilience is the ability of a supply chain to maintain or quickly restore its normal operations in the face of unexpected events such as natural disasters, pandemics, cyber-attacks, and other types of disruptions.

The cost of supply chain disruption can vary greatly depending on the industry and specific circumstances of the disruption. In general, supply chain disruptions can result in lost revenue, increased expenses, and damage to a company’s reputation. The cost of a disruption can include expenses such as emergency transportation, expediting shipments, and overtime pay for employees. The loss of revenue can occur from production shutdowns, lost sales, and increased costs for goods and services. Additionally, disruptions can also damage a company’s reputation with customers and partners, resulting in long-term financial losses. The cost of supply chain disruption can also be high in terms of human life and environmental impact.

In this article, we will explore the importance of supply chain resilience in today’s business world and discuss how businesses can prepare for the unexpected.

Importance of Supply Chain Resilience (SCR)

The importance of supply chain resilience

cannot be overstated. Disruptions can have a significant impact on a business’s bottom line.

Supply chain management abstract concept vector illustration. Logistics operations control, storage of goods and services, product delivery, retail distribution, transportation abstract metaphor.

Downtime, lost sales, and reduced customer satisfaction are just a few examples of the potential consequences of supply chain disruptions.In today’s global economy, supply chains are more complex and interconnected than ever before, making them more vulnerable to disruptions. This is why businesses must take a proactive approach to supply chain resilience and develop strategies to minimize the impact of disruptions. Supply chain resilience should be must and mandatory as part of overall supply chain management for businesses across the world.

Components of Supply Chain Resilience

Risk Assessment

One key component of supply chain resilience is risk assessment. Businesses must identify and assess potential risks to their supply chain and develop plans to mitigate them. This includes identifying critical suppliers and assessing their ability to withstand disruptions, as well as developing contingency plans for potential disruptions. By identifying and assessing potential risks, businesses can take proactive steps to minimize the impact of disruptions.

Real Time Visibility and Risk Intelligence

Supply Chain visibility is another important aspect that can help to improve supply chain resilience, by early warning of disruptions: With improved visibility, businesses can detect potential disruptions early and take proactive measures to mitigate their impact. This can include rerouting shipments, finding alternative suppliers, or increasing inventory levels.

Incident Response

Another important component of supply chain resilience is incident response. Businesses must have a plan in place for responding to disruptions and restoring normal operations as quickly as possible. This includes identifying key personnel and assigning roles and responsibilities, as well as developing procedures for Critical communications with customers, suppliers, and other stakeholders. By having a plan in place for incident response, businesses can minimize the impact of disruptions and restore normal operations more quickly.

In addition to risk assessment and incident response, businesses must also focus on recovery planning. This includes identifying and mitigating the root causes of disruptions and developing plans for restoring normal operations. Recovery planning also includes identifying and mitigating the impact of disruptions on customers and other stakeholders. By focusing on recovery planning, businesses can minimize the impact of disruptions and restore normal operations more quickly.

Role of CEM Platform to implement Supply chain Resilience

Critical Event Management (CEM) and Supply Chain Resilience are closely related concepts that work together to minimize the impact of disruptions and protect a company’s bottom line. CEM is a process that helps organizations anticipate, prepare for and respond to critical events such as supply chain disruptions. It uses advanced technologies such as AI and big data to monitor and analyze supply chain operations in real-time, detect potential disruptions and respond quickly to minimize their impact. Supply Chain Resilience, on the other hand, is the ability of a supply chain to anticipate, prepare for, and respond to disruptions in a timely and effective manner, and to minimize the impact of disruptions. Implementing CEM can help companies to build a resilient supply chain by providing real-time monitoring and analysis, automated response, predictive analytics, business continuity planning and continuous improvement.

Conclusion

In conclusion, supply chain resilience is critical for businesses in today’s fast-paced and ever-changing business landscape. Disruptions can have a significant impact on a business’s bottom line, and businesses must take a proactive approach to supply chain resilience to minimize the impact of disruptions. This includes identifying and assessing potential risks, developing plans for incident response and recovery, and focusing on supply chain visibility. By preparing for the unexpected and developing strategies to minimize the impact of disruptions, businesses can maintain continuity of operations and protect their bottom line.

 

Introduction

Supply chain disruptions can happen at any time and can have a significant impact on a business’s bottom line. Downtime, lost sales, and reduced customer satisfaction are just a few examples of the potential consequences of supply chain disruptions. But the true cost of supply chain disruption goes beyond these immediate financial losses. It also includes the long-term impact on a business’s reputation, customer loyalty, and overall competitiveness.

In this article, we will explore the true cost of supply chain disruption and discuss how businesses can overcome it.

True Cost of Supply Chain Disruption by Industry Vertical

The cost of supply chain disruption can vary greatly depending on the industry and the specific circumstances of the disruption. However, some estimates of the cost of supply chain disruption for various industries are:

1. Manufacturing: According to a study by the Business Continuity Institute, the average cost of a supply chain disruption in the manufacturing industry is $610,000.
2. Retail: According to a study by the University of Tennessee, the average cost of a supply chain disruption in the retail industry is $1.1 million.
3. Pharmaceuticals: According to a study by Accenture, the average cost of a supply chain disruption in the pharmaceutical industry is $1.5 million.
4. Oil and Gas: According to a study by the Ponemon Institute, the average cost of a supply chain disruption in the oil and gas industry is $2.2 million.
5. Automotive: According to a study by the Business Continuity Institute, the average cost of a supply chain disruption in the automotive industry is $2.5 million.
6. High-Tech: According to a study by the Business Continuity Institute, the average cost of a supply chain disruption in the high-tech industry is $3.5 million.

 

It’s important to note that these are just estimates and the actual cost of a supply chain disruption can vary widely depending on the specific circumstances of the disruption and the size of the business. Additionally, this cost also includes the indirect cost such as reputational damage, loss of customer trust and long term impact on competitiveness.

 

Consequences of Supply Chain Disruptions

• Lost Revenue : The first and most obvious cost of supply chain disruption is lost revenue. When a business is unable to meet customer demand due to a disruption, it loses potential sales. This can have a significant impact on a business’s bottom line. The cost of lost revenue can be further compounded by increased expenses such as the cost of finding new suppliers, expediting shipments, and dealing with customer complaints.

• Customer Satisfaction: Another cost of supply chain disruption is reduced customer satisfaction. When a business is unable to meet customer demand, it can lead to frustrated customers who may take their business elsewhere. This can have a long-term impact on a business’s reputation and customer loyalty. Additionally, if a business is unable to meet customer demand due to a disruption, it can lead to a loss of market share to competitors.

• Competitiveness: The true cost of supply chain disruption also includes the long-term impact on a business’s competitiveness. When a business is unable to meet customer demand, it can lead to a loss of market share to competitors. Additionally, if a business is unable to meet customer demand due to a disruption, it can lead to a loss of market share to competitors. This can have a long-term impact on a business’s competitiveness, making it more difficult for the business to win new customers and retain existing ones.

 

How companies can overcome Supply chain Disruptions

So, how can businesses overcome the true cost of supply chain disruption? One key strategy is to invest in
supply chain visibility and risk management. This includes identifying and assessing potential risks to your supply chain and developing plans to mitigate them. This includes identifying critical suppliers and assessing their ability to withstand disruptions, as well as developing contingency plans for potential disruptions. Additionally, by using technology such as Internet of Things (IoT) devices and advanced analytics, businesses can gain real-time visibility into their supply chain and quickly respond to disruptions.

Another strategy is to build a resilient supply chain. This includes investing in redundancy, such as having multiple suppliers for critical components, as well as developing plans for incident response and recovery. Additionally, businesses can work to build strong relationships with suppliers, which can help to minimize the impact of disruptions.

 

Conclusion

In conclusion, the true cost of supply chain disruption goes beyond immediate financial losses. It also includes the long-term impact on a business’s reputation, customer loyalty, and overall competitiveness. To overcome the true cost of supply chain disruption, businesses must take a proactive approach to supply chain visibility and risk management, as well as invest in building a resilient supply chain. By doing so, they can minimize the impact of disruptions and protect their bottom line in the long term.