Supply chain resilience and risk – lessons from the crisis

Sam Miles Date published: Feb 28, 23

Looking back on the supply chain bottlenecks that we’ve seen over the last three years, you can point to Covid-19 as the starting point. It was an unexpected catastrophe, and how much planning can you do for an unprecedented pandemic? Covid-19 led into travel restrictions, China’s zero-covid policy, and labour shortages - ultimately a mix of factors contributing to shortages in varying amounts of materials and products that tested the supply chain resilience of organisations worldwide.

This was then exacerbated by the Russian invasion of Ukraine. This had a dramatic impact on the export of materials from Russia to Europe, particularly energy resources and industrial metals. Again, an event that would be challenging to plan for and predict.

We’re still reeling from the effects of the crisis. While 2023, on the whole, doesn’t look as problematic as 2021 or 2022, the issues haven’t evaporated completely. Geopolitical turmoil is still ever present, labour shortages still persist, and the economic impacts of the looming recession are sure to be damaging. 

Predicting the unpredictable         

This is bit of an oxymoron and for good reason. It is impossible to try and predict the specific causes of supply chain disruption. But you can be prepared for disruption, whatever the cause, and that is the key. This is where supply chain resilience and managing your supply chain risk comes into play.

According to a 2023 Capgemini report, 89% of executives see supply-chain disruption as the biggest short-term risk for their organisation and 43% of executives say that their organisation will increase investments in their supply chain in the next 12-18 months.

Building a resilient supply chain

It is vital that your supply chain continues to evolve and adapt over time to changing technology, new regulations, and customer choice and demand. However, many organisations do not evaluate how resilient their supply chain is, on a regular basis.

Have your suppliers set up business continuity plans?

A business continuity plan is a guideline for ensuring your business can continue to deliver at acceptable levels in the event of a disruption. According to research by the APQC, 44% of supply chain professionals had not reached the stage of collecting business continuity plans. It’s an essential part of your risk analysis to be collecting business continuity plans so you can do two things:

1. Ensure the key stakeholders in your supply chain are assessing themselves and their customers as to whether they can achieve their planned objectives
   
   
2. Ensure that your suppliers are resilient enough to respond when disruptions occur

Having access to the contingency plans of your suppliers prevents additional costs and loss of revenue when disruptions happen. It also makes it easier to manage the business risks associated with your supply chain

Are you effectively managing your business processes?

Implementing a robust business management system will allow you to streamline your fundamental processes when it comes to supplier management. When key strategies are in place to manage both everyday and exceptional risks through continual review and assessment, your vulnerability will be reduced.

Supply chain risk management

Why do supply chains break down?

• Suppliers failing to continually meet the needs and expectations of their customers
• Interrelated processes have not been identified and understood
• The expectations and intentions of the supplier are not clearly understood
• All suppliers within the chain have not been identified

How can you control risk?

• Roles and responsibilities are clearly defined and understood by everyone in the supply chain. Tasks and actions should be assigned to relevant people and then measured upon completion.
• Top level management are involved in the business objectives and strategy so that the right people are making the right decisions. External auditors can then see that senior managers have visibility of, and are signing off, key business decisions.
• Interested parties are properly trained. Dedicated training plans should be put in place to ensure that responsibilities are carried out safely and correctly.
• You have easy access to documented information to help you manage the business system. All documentation should be available to relevant stakeholders in a controlled manner.
• The needs and expectations of your supplier are clearly understood. Identify, measure and monitor key expectations and take the relevant actions.
  
  

How a digital quality management system helps you build a resilient supply chain

A digital QMS like Ideagen Q-Pulse allows you to:

• Perform detailed supplier audits and appraisals and provides a platform for suppliers to directly upload their self-assessments to your central QMS system. Automatically notifying the relevant stakeholders
• Identify all key processes and track them through reporting and auditing
• Store key documentation such as SLAs or contracts
• Delve into the key steps of each operation and add stakeholders to relevant stages. Assign tasks that can be monitored to completion

Discover Q-Pulse QMS

Discover how Q-Pulse Quality Management Software can help you reinforce your supply chain resilience