Day two of BCAW and Senior Consultant, Gavin Watt, explores what organisations can do to attempt to protect themselves from supply chain risks.
What Can Organisations Do To Attempt To Protect Themselves From Supply Chain Risks?
Supplier bankruptcy, trade disputes, political instability, pandemics, natural disasters and cyber-attacks are all seen to be key factors in supply chain disruption. There can be no escaping such supply chain risks over the past few years from Brexit to Covid, and onto the War in Ukraine and the associated cyber-attacks, to the cost -of-living crisis engulfing the UK and beyond. Added to this the constant environmental issues and suppliers collapses it is clear that supply chain vulnerability has rarely been seen as such a threat. Such disruptions can have a devastating impact on an organisation, and this shows how vital it is for organisations to be agile and adaptive.
What can organisations do to attempt to protect themselves from such risks? First and foremost, those organisations who use business continuity as a ‘tick box exercise’, or as a requirement from their insurance company need to start truly embedding Business Continuity into business-as-usual activities as soon as possible.
Reactive approaches to supply chain risk are no longer acceptable for most organisations which was especially noted during Covid and through the war in Ukraine. To succeed, a proactive approach is required to ensure that many supply chain risks can be identified, or potentially mitigated before they become a crisis.
One key option would appear to have no connection to risk management strategies and could be one of the most straightforward options available. Building stronger relationships with current suppliers. Simple, easy but a highly successful, investment free option. Seems very old school but sometimes the old ways are the best. No fancy analytics, no Artificial Intelligence but good old-fashioned relationship building. Clearly understanding what each side of the partnership needs can help provide a more holistic relationship and understanding of needs during a disruption.
Consistent horizon scanning is also essential for any organisation of any size and structure. By monitoring the supply chain, by also monitoring the supply chain or risks of competitors, can also help provide a more robust approach to supply chain risks. Starting on the front foot instead of chasing the pack. Having a greater understanding of geopolitical risks, market forces and national and international news can provide a clearer picture at every turn.
Investment in newer technologies’ (although slightly going against an earlier point…) can also keep an organisation ahead of the curve, the world keeps moving and developing and so organisations must consider doing all they can too. This may be unnecessary for all, but supply chain visibility tools could be used to great effect.
Then we come to the more traditional Business Continuity and risk management solutions. Developing greater redundancy into supply chains, by ensuring you have multiple suppliers available, differing delivery partners, and developing a real BC partnership throughout your own organisation and your supply chain will also be key to avoiding potential distress. Avoiding bad decisions can also help, thinking if a particular chicken episode form 2018…
Contingency planning is another key decision that can help in the avoidance of supply chain catastrophes as these can be designed specifically around risks facing the business, These can then be exercised to show to the organisation, your partners and the wider community that you have a strong and developed supply chain capability and that Business Continuity is clearly well embedded in your organisation.
Finally, there is the gold fashioned risk assessment. Having an overview of the key risk and threats that may hang overt an organisation. From suppliers to customers, to any other key stakeholders, moves can be made to ensure a stronger and more resilient organisation of the future.
Any or all of the options stated can be considerations for organisations to develop more secure, stronger, more resilient supply chains in a world full of uncertain futures.