STATE OF FLUX
Introduction
I n part one of this publication we examined how the COVID-19 pandemic highlighted major gaps in risk planning. The sudden, sustained, and broad impact of the pandemic had (and continues to have) a far- reaching effect on supply chains, businesses, jobs and people. The response from procurement has to be two-fold. First, from a risk management perspective, protecting supply chains with effective controls that are proven to be effective. Second, building on risk management, to rethink how we manage our suppliers and help them operate safe and resilient supply chains. We must not miss the opportunity to work collaboratively with our suppliers to create transparency, build stronger supply chains, and facilitate better working relationships. According to our research, over 50% of companies reported that problems occurred further down the supply chain than their first tier suppliers. And it wasn’t just logistics and distribution that was the problem – this accounted for
just under half of the reported issues. Technology was also revealed as a significant weakness; accuracy of data, and access to timely information to allow supplier collaboration as a response to the crisis was a major issue. The fact that the much needed management information was fragmented (due to distribution across several systems) further aggravated the situation. Our research findings and supporting data is published in our 2020 Global Research Report “Supplier Management at Speed”. In our opinion if the global economy is to recover and move forward, procurement and supply chain need to reinvent supplier relationships to be more collaborative at all levels. The Safe Supplier Operating Standard presented in this paper is intended to provide a catalyst – to provide a valuable and practical focal point for collaboration, and for procurement and supply chain to work with their suppliers to investigate and address the major risk areas identified in Part One – “Seven Unanticipated Risks and Supplier Management at Speed”.
Over 50% of companies report that problems occur further down the supply chain than their first tier suppliers.”
Further down the supply chain
58%
Logistics and distribution
48%
Further down the supply chain
36%
Other
10%
Where in the supply chain did the most problems occur? Source: State of Flux research
4
COVID-19 SAFE SUPPLIER OPERATING STANDARD PART TWO
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