Companies 'having to take action against supply chain disruption'

Businesses are having to improve their contingency planning due to the growing issue of supply chain disruptions due to major global events.

A report from the Wall Street Journal has noted that many companies were hit by disruption in 2011 due to political upheavals and natural disasters, such as the Japanese earthquake and tsunami in March.

The impact of these events was exacerbated by the fact that many firms have been streamlining their supply chains over the past decade to reduce costs, leaving their procurement links extremely vulnerable.

Robert Sutton, vice president for consumer retail, healthcare and transportation customers at logistics firm Deutsche Post DHL in Tokyo, said firms are becoming aware of "the fragility of the supply chains".

However, many companies remain reluctant to bolster their inventory due to cost issues, instead working to decrease their exposure to risk or convince suppliers to improve their own foundations.

This follows a report from FM Global last month which suggested that large firms are particularly wary of supply chain disruptions in China, due to their growing reliance on the territory.