Supply chain disruption has hit 98 per cent of businesses in the US that took part in a recent survey on the issue by Interos.
The biggest impacts included fluctuations in supplier prices and many experienced orders being paused or slow to fulfill because of the additional safety precautions brought in because of COVID-19 (both 44 per cent).
Many had seen a reduce in demand for their services which had led to an inability for the business to fulfill contracts with suppliers – some said they had been affected by movement restrictions.
Geopolitics
Not surprisingly, 57 per cent said that the pandemic remained the biggest threat to their supply chains. The other main threats included cyber attacks and breaches (41 per cent), restricted or sanctioned countries (34 per cent) and bankruptcy/ liquidity (33 per cent).
“Taken together, these three risks illustrate the challenging threat environment as supply chains seek greater data security and trusted technologies, while navigating a complex regulatory environment driven by these geopolitical and adversarial environments,” the report said.
Vulnerabilities exposed
Almost half of businesses admitted that they had failed to plan for long-term disruption to their supply chains prior to the pandemic.
This failure has led to a number of vulnerabilities coming to the surface, including too much regional or geographic concentration within the supply chain (45 per cent), single point dependencies or bottle necks (43 per cent) and a lack of understanding over how global supply chains are inter-dependent (38 per cent).
Many organisations plan to improve their supply chains. “Continuously monitoring, identifying and employing alternate suppliers remain the most common action respondents anticipate taking in the future, while continuous monitoring across the supply chain and cybersecurity monitoring are close behind,” said the report
“Over a third of respondents identified onshoring and diversifying suppliers across geographic regions as a future action, and regulatory and compliance considerations round out the most common steps organizations will take looking ahead,” it added.
Making it happen
Greg Schlegel, Adjunct Professor, ERM, Enterprise Risk Management, Villanova University, EMBA, says that companies often fail to act in a timely way or learn the lessons of events such as a pandemic.
“Most businesses do NOT embrace or embark on a strategic risk journey until they experience a risk event, he told IRM. “If they do it’s all hands on deck 24/7, in an attempt to survive the event. If they do survive the event a lot of companies will go back to business as usual. Many companies do not survive a moderate-severe global risk event like the COVID-19 virus.”
Members can find out more about IRM’s Supply Chain Risk Management Certificate to ensure they are up-to-date with current principles and practices, can protect their organisations and enhance career prospects and earning potential.
