Posted by  Ruby Pope  Published on  27 Mar 2019
  • Supply Chain
  • Risk & Compliance
  • Supplier Performance

Modernise your processes to get actionable insights and minimise disruption

Recent headlines over Brexit have highlighted the fragile economics of modern supply chain management. It’s been suggested that supplies of automotive parts to car manufacturers and fresh produce to supermarkets could be particularly affected if the UK’s withdrawal from the European Union with no deal goes ahead. Juggernaut tailbacks along several miles of motorways leading to the French ports of Calais and Dunkirk are predicted once border controls and customs checks are reintroduced, leading to potential food shortages and layoffs at car plants and automotive parts suppliers in the UK.

Of course, risks to the supply chain are not confined to political changes such as Brexit but can arise from a number of different factors such as natural disasters, strikes, cyber threats and security breaches to mention just a few. Although natural disasters lie beyond the control of organisations, post-disaster impact on the supply chain can be significantly minimised with strategic disruption planning. Internal factors (over which you have much greater control) such as establishing better transparency into suppliers and automating some manual operations can further mitigate adverse effects to supply chains as well as speed up procurement processes to restore BAU in the aftermath of an event.

Indeed, it’s not a matter of whether businesses will suffer supply chain disruption but when – the BCI Supply Chain Resilience Report 2018 found that 56% of businesses have suffered a supply chain disruption in the past 12 months. For many organisations, the response to this threat has been dangerously slow as only 38% of businesses are saying they are currently employing technology to predict, monitor, record, measure and report on supply chain disruptions.

60% of companies report[1] that risk management data is completely siloed (with data from every corner of a company not integrated and formed into a complete picture of risk). Without a single view of the supply base, it becomes an uphill task to efficiently monitor and manage supplier risk. All too often the process of evaluating and reporting on suppliers is filled with poor quality data – there’s duplication of effort and wasted time spent chasing additional updates (both internally and with suppliers) not to mention the lack of standardisation in approach to gathering the data across different operating companies and geographies.

There is a huge opportunity to make improvements, introduce automation and agree a standardised approach in gathering the data required. To succeed, organizations must establish processes and use tools that automatically deliver analytically sound and structured information that is easily accessible and understood. They need to ensure clear communication with, and verification of, their suppliers – with quantitative (e.g. financial data and security protocols) and qualitative (e.g. sustainability and corporate responsibility guidelines) information to build a more rounded – and standardised – profile of each one and then make them accessible to procurement professionals across the business.

Using today’s cloud-based tools to manage supplier information, data is centralised and enables real-time monitoring. The ability to integrate information about suppliers from varied sources into a single display, layer it with analytics and third-party intelligence enables dynamic decision-making and flexible reaction to changing trading situations, minimising risks in the supplier chain as well as maintaining a clean and efficient database of suppliers.

[1] Dun and Bradstreet 2018 Global Risk Management Study

 

The ability to respond rapidly to disruptions and proactively prepare for supplier vulnerabilities is essential for procurement teams trying to mitigate risks in their supply chain.

Download our latest whitepaper Safeguarding Your Supply Chain to learn how