Businesses must develop a more robust understanding of the make-up of critical multi-tier supply chains in order to mitigate the impact of disruption, according to a new report from Chubb in the UK.
As part of a two-part series focusing on present and emerging supply chain risks, Chubb analysed the current international supply chain risk landscape to identify some of the main issues impacting businesses around the world.
Businesses have experienced unprecedented disruption to just-in-time (JIT) supply chain models in the wake of several man-made and natural disasters, along with geopolitical events such as Brexit, COVID-19, the Russia-Ukraine war, rising inflation and the risk of a global recession.
These global events have caused “a stream of knock-on effects” to supply chains and logistics, according to the Chubb report, including mass labour and goods shortages, container costs, energy access, and other local factors such as workforce strikes and port congestion.
“The past few years have taught us that robust risk management and business resilience strategies are critical to future-proofing supply chains,” said Peter Kelderman, Chubb Europe’s marine risk management leader and co-author of the supply chain risk report.
“This report series demonstrates how important it is for global businesses to have an understanding of the developing exposures across their supply chains and to be equipped with the right strategies and support to reduce their exposure to business interruption.”
In the first part of the report, Chubb examined developing supply chain trends, including causes and effects and what they mean for organisations in the UK and globally. The second part, meanwhile, explored how organisations can build resilience in their supply chains through robust risk mitigation, including strategies to enable risk and supply chain managers to develop risk management capabilities, build operational strength, and prepare for other challenges.
Overall, Chubb offered insights into how organisations can bolster their risk management framework, providing advice such as adopting appropriate data technology and incorporating clear, integrated risk reporting metrics and KPIs
“With risk management, you are always working on it, making a permanent change until the next one,” said Kelderman.
“No matter a company’s size, you might rely on something as small as a specialist screw or fastener to get your product out,” added Nick Wildgoose, CEO of Supplien Consulting and board member of the Supply Chain Risk Leadership Council, who also contributed to the report. “What will you do if the supplier fails?”