STATE OF FLUX
The seven risks
Many organisations think they are good at managing their suppliers however our 13 years of annual supplier management research (giving us insight into >2,000 organisations with a global database of >2,000,000 data points) has shown that only 17% would be considered leaders in their approach to supplier management.
7 % OFORGANISATIONS INCLUDEPANDEMIC RISKS INTHEIRRISK MANAGEMENT SCENARIOSAND PLANNING 47 %
Our research also shows the reaction speed and the duration of disruption are both compounding the long-term impacts. The longer you wait, the more likely you’ll miss out on customer of choice benefits that are critical in tough times. When it comes to risk management, are you one of the 17% who are demonstrating supplier management leadership? Do your continuity plans deliver a graceful recovery with a tolerable level of disruption, without any longterm impact on delivery of business objectives?
Or are you one of the 83% that are operating with potentially flawed continuity plans and poorly managed supplier relationships? If so, you are at risk of experiencing supply disruption and loss of value. In helping global organisations to be more resilient during the pandemic, we have identified seven risk themes that are surprisingly overlooked and have been brought into sharp focus: 1. Health and availability of supplier workforce 2. Financial viability of the supplier 3. Organisational preparedness 4. Social distancing requirements 5. Port and airport closures (operating at skeleton operational levels) 6. Risk of spreading coronavirus via physical products 7. Demand shocks We’ll take a look at each one, suggesting our recommended actions to address the risks above.
OFORGANISATIONSSAID THEIRRISKMANAGEMENT WAS INSUFFICIENT 81 % OFSUPPLYCHAINS WEREAFFECTED
Is this happening to you?
INCIDENT
Damaging disruption with permanent loss
Source: State of Flux research
Time
Or are you one of the 9% that is using supplier management to do this?
INCIDENT
Managed disruption with recovery
Time
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COVID-19 SAFE SUPPLIER OPERATING STANDARD PART ONE
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