When it comes to how that proactivity was channelled, we analysed the most frequently employed mitigating actions and found 60% of companies reached out to their suppliers to engage in joint planning activities to mitigate risk. They also started to share more information (42%) and increased the frequency of meetings. While obviously, these actions were not taken in isolation, they were clearly adopted ahead of the other physical mitigation actions, such as increasing stock levels and moving to multi-sourcing. So, in hindsight which of these mitigating actions were considered to be the most successful? Our research suggests the strategies adopted by companies were largely considered successful. The three most successful strategies were: reaching out to suppliers to engage in joint planning, sharing more information and increasing the frequency of meetings. These, in turn, were followed by the more physical mitigation actions of increasing stock levels and expanding the number of suppliers as cover. Confidence in the future With two years of disruption behind us and the prediction of more to come, organisations must be gearing themselves up to become more resilient and able to cope with uncertainty and rapidly changing circumstances over the years to come. So, how confident are organisations that they will be able to cope? Feedback shows the majority of companies are reasonably confident that they have the capabilities to cope with a sustained period of uncertainty and disruption. Companies describing themselves as confident or highly confident accounted for 56% of respondents, with just 16% not confident. Unsurprisingly, Leaders are the most confident, as reflected in
How supply chain disruptions were mitigated (all respondents)
More frequent supplier
Joint-business planning with critical suppliers
meetings 26%
60%
Supply chain mapping 25%
Shared more information with suppliers
42%
Reviewed supplier segmentation 24%
37% Increased inventory 37% Used in-house/third party programmes to help monitor risks 41% Supplier executive engagement
Changed suppliers 20% Increased focus on key risk indicators 24%
“Resilience is the ability to prevent what you can , harnessed with the ability to manage what you can’t ”.
Implemented faster escalation
All the indicators are that the disruption experienced over the last two years is set to continue. However, that is not to say the type and cause of the disruption will remain the same. We have already seen a transition from the Covid impact to the war in Ukraine; doubtless, there is more to come. Organisations must look at all aspects of their business and operations to identify and mitigate the threats. This will require a major uplift in the resourcing and skills for risk management at all stages in the procurement lifecycle. While existing supply arrangements need to be shored up by better risk management, future supply solutions must build resilience from the start.
The key opportunities in the area of resilience are:
pathways 20%
Implemented business
continuity plans 37%
• Anticipate and plan for future disruptions. • Increase resource and skill levels in supply chain risk management. • Realign the supplier management value proposition to increase an emphasis on supply chain resilience and risk management. • Realign category management and sourcing processes to balance cost with supply chain resilience and business continuity.
Incentivised suppliers for
flexibility 11%
Adopted more flexible approaches to contracts 29% Implemented multi-sourcing 37%
Other 6%
Disruptions in the scope of current business continuity plans (all respondents)
Having a business continuity plan is often a contractual requirement and, when fulfilled, can be rarely tested or revisited. Given the rapidly changing nature of risks, this could be a fatal error. Here we explore the types of disruption events organisations currently have business continuity plans in place for, perhaps giving us an insight into the types of risks that organisations are most worried about and possibly revealing some they should be more worried about. Based on our survey, the threat most organisations are planning for is a cyber-attack. However, over half of the organisations we contacted reported that they have business continuity plans for such an event. The second most significant threat being predicted is that some form of a natural disaster such as an earthquake, tsunami or major weather event could disrupt supplies. This is considered a threat by 47% of companies overall. Next on the list, by over 40%, predicted long-term labour shortage as a threat that must be planned for.
Cyber-attacks delaying manufacturing or delivery of services Natural disasters delaying manufacturing or delivery of services New unprecedented regulatory action due to geopolitical events e.g. War, Immigration laws [Ukraine, Brexit] Shortage of workers (i.e. due to Covid) delaying manufacturing or delivery of services
51%
47%
40%
65% of companies in Europe reported disruption as a result of changing regulations.
39%
Sudden rise in demand/increase in consumer preference
31%
feedback from 88% of them. Business continuity planning
Terrorist attacks delaying manufacturing or delivery of
services 27%
Business continuity can be defined as “the capability of an organisation to continue delivering products or services at pre-defined acceptable levels following a disruptive incident”. It is one of the more established risk mitigation tools but is not always as robust and thorough as it should be.
Limited visibility into forecasting
and resource allocation 27%
Sudden fall in demand/decrease
in consumer preference 23%
Labour disputes 21% No plan in place 15%
32
33
Powered by FlippingBook