Businesses must put more effort into pre-planning for businessinterruption going into 2013, says a new Zurich report namingsupply-chain disruption as the top risk “blind spot” of theyear.

The report surveyed 600 of Zurich's global “risk engineers” thatwork to reduce insurance-related and other corporatelosses.

The results back up a Zurich and Business Continuity Institute(BCI) survey noting that 73 percent of organizations recorded atleast one disruption in 2011. Half of respondents reported two.

“As the supply chain gets more global, it starts looking likemore of a spiderweb than a chain,” says Linda Conrad, director ofstrategic risk for Zurich Global Corporate in North AmericaBusiness.

“Companies often underestimate their risk, but historically, 40percent of companies experiencing extended interruption completelygo out of business.”

Conrad suggests organizations map out their supply chain,including first-and-second tier contracted suppliers, and quantifyeach link by financial stability and even geopolitical issues inthe area where it is located.

“Value is about more than being able to name the lowest or bestprice for a product or service,” says Conrad. “It is also how, inthe long-run, it is going to help the organization prevent largerlosses.”

The BCI survey found that the leading causes of supply-chaindisruption are unplanned IT or telecom outages, with 52 percent oforganizations surveyed experiencing some or high disruption as aresult.

Disruption is also becoming more consequential than it was in2011, with one in five companies having registered asingle-incident loss of more than $161 million.

Effectively managing supply-chain continuity is critical notjust because of the immediate costs of disruption, but also thelonger-term consequences to stakeholder confidence and reputationaldamage, says Zurich, and it should be thought of as part ofeveryday operations — not as an emergency escape route.