Malcolm Harrison
Malcolm Harrison

Supply chain fragility has been exposed, a more agile approach is needed

15 February 2021

The start of 2021 brings a combination of further disruption but also light at the end of this very twisty tunnel with hope that the new Covid-19 vaccines bring us. One thing is sure, we won’t return to how things were. To quote Greenpeace: “How can we go back to normal when normal was already a crisis?”

 

So where should the profession be focusing our efforts this year, both to build on the greater impact we had last year and to stay ahead of the game? The past 12 months has highlighted winners and losers as some businesses have switched supply, turned to an online model and even sought new markets in the search for a more secure customer base.

 

Those organisations who have been more adaptable have closely followed new consumer habits or delivered innovative solutions that are more attractive or useful. Having a handle on trends, access to data and intelligence to help predict what might happen will be critical factors for future success.

 

 The fragility of our supply chains has been exposed and a move to a more agile and resilient approach is required, allowing us to switch operations and supply lines quickly to limit disruption. We need a deeper understanding of our supply chains to fully expose potential pinch points and to be able to respond quickly.


Many of our operating models are simply no longer fit for purpose. Long, lean supply chains that rely on just-in-time delivery will be far less viable, or where they do remain, they will sit alongside a localisation strategy to spread the supply risk.

 

Legacy thinking often had too heavy a focus on cost – rather than value – and less on risk. We simply cannot afford to continue in this way so we must recalibrate and balance our focus towards risk and resilience. And let’s not take our eye off the ball on sustainability. I firmly believe that sustainability and risk are closely interlinked so as we move from crisis to resilience, we have an opportunity to build back a stronger model that not only safeguards our own organisations and their profitability but is better for the planet and people too.

 

Greater transparency and better visibility of our supply chains brings a deeper understanding of the potential risks, but also what our sustainable impact is and how best to react. The Black Lives Matter movement is just one example of issues – equality, diversity, and inclusion – that should sit firmly on our agenda as both responsible citizens and businesses. 


The global economy has been hard hit by Covid-19. This combined with new trade deals, and of course the UK leaving the European Union, will have an impact on international trade. Those countries hardest hit might consider more protectionist measures to rebuild their economies and we will all have to get our heads around new tariffs and administration.


Underpinning most of what I have talked about here is, of course, technology. We must continue to invest, where we can, in digitalising our businesses so that we can be more responsive, have access to better data and business intelligence, and stay connected to our suppliers. We are stronger together so bring your suppliers along on this journey with you. Communication, building trust and transparency will be more important than ever.


These are challenging but exciting times for procurement professionals, and CIPS is here as your professional partner for life. Sign up to SM Daily bulletins and make sure you are receiving your weekly CIPS update email to ensure you are getting all the support we provide. I’d like to wish you all a happy, healthy and prosperous new year.

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