Maintaining business continuity requires managing threats and the risk of business disruption. Disruptive events can stem from financial, operational, cyber, ESG, natural disasters, and supply chain disruptions.
Predicting disruptive events can be challenging, especially when referring to unknown risks that can arise suddenly.
Organisations can reduce risk exposure and even eliminate the impact of a particular type of risk event through careful planning, the use of tools, and the adoption of effective risk management processes.
Supply chain planners need to take the time to identify and categorise any risks they may encounter. To effectively manage these risks, it’s important to create a strong risk management framework and measure both known and unknown risks using key metrics. These metrics should be regularly tracked and monitored to decrease their likelihood and speed up your response time. This is especially strategic for unknown risks to maintain a competitive advantage when they do occur.
In today’s complex operating environment, supply chain data analytics play a significant role in identifying operational bottlenecks, and reducing fraudulent activities, billing anomalies, and risk scenarios. Major supply chain disruptions are no longer rare occurrences, as global shocks like COVID-19, and Russia’s invasion of Ukraine continue to affect supply networks worldwide.
The Annual Global Supply Chain Resilience 2022 Report by Interos revealed that numerous organisations experienced three significant supply chain events in the past year, excluding the conflict in Ukraine. These disruptions resulted in an average loss of $182 million in revenue per company.
Interos surveyed 1,500 decision-makers worldwide from various industries to assess the impact of ongoing supply chain disruptions. These figures might vary slightly by geography and by sector. The highest costs were reported in France ($230 million) and in pharmaceuticals and life sciences ($226 million), while the lowest were in the UK and Ireland ($142 million) and financial services ($143 million).
The key findings from the Interos’s report underlines:
- 64%, intend to make significant adjustments to their supply chain;
- 77% of these companies plan to incorporate technology within the next year to enhance their supply chain’s transparency;
- 11%, currently engage in continuous monitoring of supplier risks;
- 82% of the companies acknowledge that collective responsibility is necessary to safeguard against supply chain disruptions;
- 78% admit that they need to enhance their internal collaboration and information sharing across departments;
To effectively respond to disruptions, it is crucial to have resources and processes in place, as well as proactive strategies for risk planning, assessment, mitigation, and monitoring. Being prepared for unexpected events is of utmost importance.
To succeed in Supply Chain Risk Management, it’s important to work together and share information with all relevant parties, both within and outside the organisation. This includes suppliers and strategic partners.
We can use digital tools to analyse data and reduce risk. According to the Annual Global Supply Chain Resilience 2022 Report, 59% of those who invested in supply chain risk solutions gained a competitive edge by better understanding and mitigating risks.
Out of 1,500 people surveyed by Interos, 1,495 agreed that investing in software solutions for supply chain risk management is advantageous. Currently, less than 20% of respondents use intelligent and automated technology for this purpose. However, over 75% of respondents plan to implement it or introduce it within the next year.
Digital technologies such as big data analytics, AI, blockchain, and IoT can improve the flow of data in real-time and help manage disruptions.
Research shows that advanced technologies like blockchain and AI are becoming strategic in preventing disruptions by increasing supply chain flexibility and improving response traceability, resulting in a more robust and resilient supply chain.
The use of blockchain technology can address security and privacy concerns, detect counterfeit products, and improve traceability database systems to ensure food safety and security in supply chains.
Many companies are currently exploring the potential of blockchain technology and smart contracts to improve their supply chain planning and risk management.
The unique features of blockchain, such as increased trust, transparency, data collaboration, customer focus, and scalability make it a great technology for supply chains.
By implementing blockchain and Smart contracts, supply chains can become less vulnerable to operational and political issues, meet regulatory compliance, and avoid contract disputes.
Trakti is the only negotiation and contract lifecycle management platform integrated in the blockchain. In times of increased risk and uncertainty, Trakti Smart contracts enhance supply chain resilience and revolutionise supply chain management.
To discover how Trakti can help, get in touch now.