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Supply Chain Resilience: How to Survive Disruption and Crisis Episodes

02 July 2020

THE COVID-19 pandemic has caused major disruption to supply chains across the world and, indeed, served to reveal the fragility of the modern supply chain, as well as the importance of resilience planning and recovery in supply chain management. David Halford offers his views on planning for disruption and protecting the supply chain.

In a global economy, essentially every company is connected to or otherwise dependent on others in some way. While one business may not have been directly affected by the pandemic, the same cannot be said for one or more vendors in its own supply chain.

Supply chain resilience planning must be comprehensive. When working towards protecting operations on the cusp of a disruption such as the COVID-19 pandemic, it’s important to understand where the disruptions are that might impact value chains. Beyond the organisation itself, the business should also review the preparedness of critical third parties such as suppliers, vendors and service providers and ensure they’re as prepared as they can be for disruption.

It’s crucial to understand the dependence on entities outside the business. Remember the truism that resilience planning in a global and interconnected economy must be all-encompassing and comprehensive.

The best way for the supply chain to survive a disruption is planning ahead. With that in mind, there are some key tips for assessing the impact of a disruption to the supply chain.

Review and update

Review and update your plans. You should consider the current strategy for dealing with a disruption to your supply chain. Do you have the tools for the strategy and are there clearly defined teams with the required roles and responsibilities?

Conduct walk-throughs and other practice exercises. This is the best method for identifying gaps in procedures. By conducting walk-throughs, employees become familiar with the objectives of the plan and it ensures that they recognise their roles and responsibilities. They will also feel encouraged to use the plan as guidance and not feel like it’s a list of tasks to be followed without critical thinking. This means employees will be prepared for a variety of situations, not just a single disruption for which they have a written plan.

Assess the tools used to assist in the execution of your plans for supply chain resilience. Outdated technologies can corrupt a well-designed supply chain resilience plan. It’s important to detect any deficiencies in available tools and upgrade the tool set as this will reduce the supply chain risk.

Conduct an after-action study following a disruption. Update your plans with the learnings and address any issues that impacted your supply chain to ensure that the same doesn’t happen again during the next crisis.

Valuable learning and motivation

Undeniably, COVID-19 continues to be an issue for businesses across all industries even as economies are beginning to open up. The pandemic provides valuable learning and motivation to ensure that the supply chain is better prepared for the future. The key to surviving any future disruptions is to focus on risk and resilience management.

Looking back, those businesses that took contingency planning seriously and regularly evaluated their disruption preparedness prior to the pandemic were in much better shape to face the disruption and limit the impact on their supply chain.

Putting it simply, in order to avoid similar issues in the future, you should already begin preparing for the next big coronavirus-esque disruption. Don’t fall into the trap of waiting for the next disaster to hit and halt your operations.

David Halford is Vice-President of Business Continuity and Disaster Recovery Solutions at Fusion Risk Management