How well do you know your supply chains?
“What you don’t know about your supply chain can hurt you.”
Nick Wildgoose, Board Member of the Supply Chain Risk Leadership Council
This is a timely reminder, especially with the ongoing supply chain challenges arising from geopolitical conflict, high inflation and an increasing risk of global recession.
Supply chains are complex, and unique to each business. With 20% of products producing 80% of annual profitability for many companies, having a robust risk management approach is critical to future-proofing supply chains and should be a key priority on every company’s corporate agenda.
Having a thorough understanding of your company's supply chain, and identifying where all the risks lie, is fundamental to developing effective risk management strategies. It involves mapping the full supply chain and all business processes, as well as understanding what makes it vulnerable.
Being able to answer the following questions can go a long way towards building your company’s supply chain resilience.
- Have appropriate capabilities been established to assess supply chain exposures, either through internal resource or engaging a professional specialist?
- Does your company’s business resilience strategy include a regular review of its supply chain beyond tier 1 suppliers?
- Has an analysis been conducted to identify supply chain risk accumulations, which may include geographic exposures, transportation restrictions, regulatory or political risks?
- Can the effectiveness of your supply chain resilience strategy be validated? This might be done via desktop or real-life exercises, real-time inventory management data, monitoring SLAs for effectiveness or having proven back-up systems in place.
- Has your company implemented a Business Continuity Management system to a recognised standard (e.g., ISO 22301)?
- Is a suitable budget available to support business resilience measures, including inventory stockpiling, alternative suppliers, utility back-up capability, business continuity plan development/maintenance?
Would you like to know more?
The Spectre of Disruption is a two-part Chubb report designed to help you ask the right questions about your company’s supply chain. The reports explore:
- the causes and effects of global supply chain disruption
- risk management strategies that can help improve supply chain management, reduce exposure to business interruption, and boost operational resilience within your business
Download the reports
Part 1: Supply chain disruption and what it means for business
Part 2: Supply chain disruption: how to mitigate risks
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