Supply chains are in an extremely vulnerable position, having been shaken to the core by global and political events over the past few years. Many businesses, that are still fragile from the pandemic, are having to contend with rebuilding organisations on precarious supply chain grounds. So, what are some of the events that have affected supply chains to date and what is on the horizon?
The most obvious impact on supply chains of late is Covid-19, with 94% of Fortune 500 companies having experienced disruption due to the pandemic. As countries locked down borders – to prevent the transmission of new and potentially more contagious variants of Covid-19 – supply chains descended into chaos, severely impacting the movement of goods. Supply chains were further impacted by isolation requirements, creating staff shortages – making planning and operating even more challenging for businesses.
An area expected to impact supply chains is around environmental, social and governance (ESG) regulations. With organisations facing increased pressure from investors and stakeholders to improve ESG ratings, businesses must ensure that supply chains are environmentally and socially responsible. This means that organisations not only have to look inwards at creating more sustainable practices, but across entire supply chains too – which have become increasingly complex and dispersed over the years. Organisations must work backwards to assess existing suppliers, whilst setting up stringent procedures to vet new providers.
Disperse supply chains also create an issue for cyber security, exposing a weak link for businesses to be attacked. More than one in three (35%) Chief Information Security Officers (CISOs) said that fixing cyber vulnerabilities in their supply chains is a clear post-pandemic priority and half (50%) agreed that the third and fourth parties in their supply chains represented the greatest compliance risk to their business. As supply chains become ever more complex, organisations need to ensure that proper cyber due diligence is conducted – safeguarding businesses and customers alike.
In order to better manage supply chains – getting the most out of agreements, avoiding disruption, and improving resilience – many organisations are increasing investment in technology. New and emerging technologies such blockchain, AI and robotics, give businesses greater insight into supply chain threats and opportunities on the horizon and can automate many activities. In fact research by Deloitte found that the highest performing chief procurement officers (CPOs) are 18 times more likely to have fully developed AI and cognitive abilities – representing where agile organisations are currently investing.
From mapping energy hotspots that damage ESG ratings to utilising computerised intelligence that can fend off cyber threats, or calculating trade risks to identifying greater efficiencies, technology presents significant answers for many existing supply chain issues. It’s something that plenty of businesses are already utilising, with research by PwC finding that 70% of organisations are using AI in at least one area of supply chain optimisation.
Supply chain expertise
Given how much movement there is in the market at present, it’s no wonder that there has been an increase in demand for professionals with supply chain expertise. From understanding the end-to-end supply chain, to identifying where business processes can be optimised – or establishing where productivity can be increased, agility realised, and visibility improved – quality professionals are in high demand. No truer is this than for supply chain professionals that have exceptional technological expertise. Those that understand the business application of new and emerging technologies – such as analytics driving deep insight or digitising and automating various supply chain activities – these professionals are in even higher demand.
With supply chains presenting as many opportunities as it does risk, it’s imperative that businesses have a much tighter rein on its partnerships. The pandemic exposed supply chain weaknesses, severely impacting continuity of service. With future disruption on the horizon – whether political, environmental, or unforeseen – organisations need to ensure that supply chains are as resilient to turmoil as possible. Many organisations are looking to supply chain professionals and technology for the answer, putting them in the best position for growth opportunities whilst outmanoeuvring uncertainty.