Recent events have been a timely reminder that most organisations depend on having a resilient supply chain in order to serve their customer. In fact they now compete based on their supply chains. The values at risk of supply chain failure has also grown. The failure of just one node can have very significant impacts on an organisation’s financial performance.
In preparing for the future organisations will need to restructure their supply chains and in doing this it will be critical to consider risk appropriately. This is not only about pandemic risk, but the ongoing financial, geopolitical and climate risks that will be faced by these supply chains.
As we move forward, the use of new technology and data sources offer a significant opportunity to drive supply chain resilience and sustainability whilst improving financial performance.
Opportunities for Improvement
We have seen on many occasions where organisations did not understand their financial exposure to a particular supplier production facility or a logistical hub and suffered major profit and cash flow impacts.
You can make significant improvements in your business performance with relatively small investments in your supply chain resilience. For example, a number of the risk data sets that you can apply once you have mapped out even just your critical Tier 1 supplies are either free or subject to a small cost.
It is also important to understand your relative level of supply chain risk management maturity, enabling you to benchmark how you are performing against your industry competitors. This can look at several different dimensions such as:
- Leadership: including resource commitment and program management
- Planning: including Supply Chain Mapping, risk tolerances, business impacts, stakeholder mapping
- Implementation: including risk monitoring, risk treatment and event communication
- Evaluation: including program metrics and performance review
- Improvement: including change management
How we can help...
Davies & Robson can support you in mapping your supply chain and applying risk factors to identify potential points of failure, the risk attached to that and the financial impact on your organisation.
We can based on a business impact appraisal analysis, run scenarios to test out your ability to recover from the highest impact supply chain events on your business performance , such as the loss of the key production or service facility of your most important supplier.