Supply Chain Resilience Index
The Achilles Supply Chain Resilience Index (ASCRI) is a time series index measuring changes in supply chain risk. The index measures underlying supply chain risk by country across six categories: Economic, Environmental, Labour Practices, Legal and Governance, Resilience, and Safety and Security. Understanding and monitoring risk is a crucial step in effective supply chain management.
ASCRI Q3 2022
Intensifying economic headwinds continue to impact supply chains, despite respite in some areas. The ASCRI improved marginally by 1.2 points over the quarter to reach 39.8 – An improvement that sees risks classified as “high” risk, from last quarter’s “very high”.
- This would not come as a surprise considering the press coverage of energy price costs, high inflation and other economic developments; developments that are now featuring in longer term forecasts.
- The combination of the weak supply and diminishing demand is seen in a series of reductions in economic growth expectations. With recessions in major economic areas, like the Europe Union, expected to persist throughout 2023, the outlook is for intensifying supply risks.
ASCRI Q2 2022
Supply chains look increasingly exposed to global macroeconomic developments. Hitting 39.8 in the first quarter of 2022 (down from 44.9 in Q4 2021), the ASCRI is now below the 40-point barrier where risk is classified as 'very high'.
- Supply chain resilience scores fell from 44.9 in Q4 2021 to hit 39.8. Now in the riskiest classification, the ASCRI is indicating high risks are evident across almost all sectors and geographies.
- Both the Ukraine conflict and re-emergence of COVID in China have global reach and are responsible for much of the recent surge in risk. Both are affecting not only those economies directly impacted, but global supply chains and economic growth everywhere.
- Economic growth is being undermined by a jump in inflation. Some inflation is due to the war and COVID, but can also be traced to a shift in consumer spending from services to goods, which brings further strain to supply chains.
ASCRI Q4 2021
Supply chain resilience has decreased further in the final quarter of 2021 and leaves the ASCRI only marginally above the 40-point tipping point where risk becomes 'very high'.
- Further reduction in supply chain resilience score to 44.9 in Q4. Risk remains very high, and we expect the ASCRI will breach the 40% high-risk threshold in the Q1 reading.
- Shortages for key input items will continue to impact downstream supply chains. Supply chain shortages that have hampered global trade throughout 2021 will continue into 2022.
- Further 12% increase in commodity prices in Q4. Commodity price volatility expected to continue off the back of political instability related to Russia-Ukraine conflict.
ASCRI Q3 2021
Supply chain risks rise substantially in the 3 months ending in September 2021, driving resilience lower, and wreaking havoc on supply chains.
- Risk remains high - ASCRI fell to 45.4 in Q3, deeper into the high risk range.
- Price pressure - Our commodity price index has increased 68% since January 2021.
- Confidence falling - Negative sentiment regarding supply chains increased by 17%.
- Transport and logistics - BREXIT and Covid leave a 400,000 worker shortage of HGV drivers across Europe, affecting deliveries.
ASCRI Q2 2021
The ASCRI Q2 shows increasing supply chain risk in the second quarter of the year, moving from a rating in the Moderate range, to a rating in the High-Risk range.
- Risk has risen pretty dramatically, by 7 points, as key inputs are in short supply and logistical challenges make delivery difficult.
- Shortages for timber and microchips - being on the top of the list of supply chain inputs that are difficult to obtain.
- Brexit impacts have hit HGV driver availability with The Road Haulage Association reporting a shortage of 60,000 drivers in the UK.
- Global shipping reliability has fallen, resulting in an increased risk of getting supply delivered.
- Commodity prices are rising as supplies are squeezed and demand returns, meaning if securing supply it will probably be more expensive.
ASCRI Q1 2021
First data point indicates shipping disruption will keep risk elevated for early 2021.
- Ongoing disruptions from the global COVID-19 pandemic as a result of fundamental shifts in purchasing behaviour, and logistic challenges.
- Significant deterioration in shipping reliability, which fell approximately 25% in January; in addition, the impact of the Suez Canal blockage will continue to ripple through shipping lanes and supply chains, disrupting schedules and delaying shipments.
- Key raw material prices are also rising, up 12.6% from the end of 2020 in the opening months of the year, representing a 30% increase on the same period in 2020.
- Sentiment around supply chain risk on social media is, overall, negative regarding Brexit and supply chain disruption, which is reflected as upward pressure on the risk index.
In bringing together Achilles data with other global trends and statistics, and overlaying our expertise to extract useful insight, we’ve created an indispensable tool for everyone involved in supply chain risk and performance management.
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