FMJ Facilities Management magazine providing industry-specific intelligence to FM and property professionals
Blog by Gemma Archibald, Alcumus CEO, Supply Chain Division
Disruptions in the global supply chains have been a ubiquitous problem of late and have accounted for a large part of the post-pandemic turmoil affecting businesses. However, this is not the first instance in modern history where such issues have led to widespread uncertainty. Looking back, we can see recurring problems in the supply chain, stretching back to both World Wars and more recently the impact of Brexit and the war in Ukraine. One other constant is that these issues have been mitigated through innovative thinking and supply chain resilience, which serve as useful lessons for today.
LESSON 1: DIVERSIFYING SUPPLY CHAINS
WWI and WWII serve as good examples of mass disruption of supply chains on a global scale. While some of the cargo may differ from what businesses are shipping and distributing today, one key parallel can be drawn between then and now. The USA’s entry into the war, and allied Europe’s supply chains represented a key turning point, and also showed the impact of sourcing supplies from alternative production lines that may be less affected by regionalised disruptions. If we look at issues facing today’s supply chains, brought about mainly by COVID-19 and the war in Ukraine, we can see the value in securing supplies from alternative lines of production. One way to strengthen a supply chain is diversification. Supply chains that rely on one provider alone lack resilience and by making proactive contingency plans and sourcing alternative providers, companies can overcome potential disruptions with more confidence, as evidenced by Britain’s outsourcing of supplies to the USA and Canada in WWII, rather than solely relying on Europe.
LESSON 2: PREPARING FOR DISRUPTION
Another past example that serves us today is the outbreak of the SARS virus in 2003 which had a significant impact in the Asia region. While the disease proved to be a significant challenge, its lasting impact is something that has led to an increasingly resilient regional supply chain, something that benefitted businesses in the area during the COVID-19 pandemic. SARS caused a need for businesses to have back-up plans in place for such disruptions such as establishing parallel sites, shifting operations, and investing in IT to enable remote working. All of this adaptability helped when the world was altered irreparably by the outbreak of COVID-19 in 2020, giving those businesses with contingency plans in place a leg up.
LESSON 3: ENSURING REGULATORY COMPATIBILITY
Wars and pandemics are far from the only hurdles that supply chains have to contend with, though. Regulatory changes can have a similarly profound impact, requiring companies to go back to the drawing board and rethink their global supply chains from the ground up. These changes also show us the vital importance of checking the levels of compliance, credibility and regulation in our supply chains ahead of time, in order to improve resilience and adaptability.
Previous examples of major regulatory changes impacting supply chains include the UK’s Modern Slavery Act 2015, which clarified what legally constituted modern slavery and explained how entities that were found culpable would be punished, reaffirming the need to make sure businesses are dealing with ethical providers. Organisations can’t engage in murky practices, partnering with subpar suppliers, and hope to get away with it. They should instead expect to be regulated at some stage or another – and should therefore set up clean operations right from the outset.
LESSON 4: PRIORITISING COMPLIANCE
In order to deal with regulatory disruptions ahead of time, companies must place compliance at the centre of their supply chain operations. They must ensure that they only work with suppliers who align with today’s ESG regulations and commonly accepted standards. By implementing supply chain compliance solutions, company’s can ensure they work with the right suppliers, verify a potential supplier’s credentials, dig into their capabilities, and ensure they’re the right fit for their organisation’s needs.
Supply chain disruption is an ever-present thorn in organisations’ sides. However, businesses will enhance their own supply chain resilience by learning from how both companies and countries overcame similar disturbances in the past. They can source alternative providers ahead of time, maintain visibility, and use instant reporting to foresee and manage supply chain disruption.
