The next 12-18 months will be severely disruptive

COVID-19 is providing immensely disruptive to the global economy, particularly for production-based businesses and their supply chains. The virus and global mitigation measures such as social distancing are causing staffing issues, closing production facilities, creating resource bottlenecks, and paralyzing networks that are dependent on just-in-time supply. This is all occurring as supply chains become ever more complex, and customers expect rapid, smart ordering and delivery.

Businesses from all industries are faced with risks of an unprecedented number and scale, but supply disruption is not a new phenomenon. Supply chains are at a near-constant threat from all manner of demand, supply, process, network and environmental risks that endanger production speed, agility, transparency and quality.

It is for this reason that many companies that have historically encountered supply chain issues have introduced risk management processes to protect themselves. These firms are currently in a robust position, but the same cannot be said for many that have yet to invest. For them, the pandemic is currently proving extremely difficult, but they will continue to be at risk from disruption for at least the next 12 to 18 months. This includes delivery failures, workforce shortages, increased delivery times, oversubscribed transshipment storage, hindered logistic service provider capacity, and more supplier bankruptcies due to a lack of financing.

Define and digitize to achieve risk transparency

Supply chain transparency gives you an unprecedented view over risks to your networks, letting you quickly identify and manage hazards. To ensure this can be undertaken quickly and effectively, BearingPoint has developed a minimum viable product (MVP) approach. Consisting of processes and digital enablers, you can use it to create a firm basis on which you can continually develop and refine your supply chain risk management approach.

Provide response teams with a supply chain risk management concept – Create a pragmatic concept comprising risks from single sources, incorporating process structures and a risk management operating model.

Form a foundation and collect granular data – Connect enterprise resource planning (ERP), supplier and procurement data to a (cloud) analytic platform. This will give an understanding of demand and supply pressures, viewed using risk dashboards and alerts.

Identify, analyze and act – Use tools such as process mining to report on and analyze your current supply situation, then act on the findings to reinforce your supply chain.

Create a long-term operating model – Using learnings from the digitalization process, create a supply chain risk management operating model that provides a blueprint for continued transparency and rapid action.

Augment your model – Using technologies such as Internet of Things (IoT), predictive analytics, AI, and automation, you can improve the flexibility of your approach and act even faster to secure your supply chains.

In BearingPoint’s experience, for example, working with a large oil and gas company it was possible to complete the above steps in as little as 10 weeks. With it, they were able to identify weak links in their supply chain, safeguarding their business and the long-term stability of their entire supply chain.

Act now to create opportunity and resilience

By acting now, you will be able to protect your business and that of your partners over what will undoubtably be a turbulent and highly uncertain period. Risk management approaches allow you to understand the challenges you are and will be facing, offering action before supply chain disruptions, and the significant stability and faster recovery that brings in a crisis.

In most cases, the cost of managing supply chain risks continuously is less than the price of disruptions. What’s more, digitized approaches are less time-consuming, more flexible and cost-effective than traditional, reactive supply chain management.


Don’t allow risk to threaten your supply chains – contact our experts today and learn how we can help.

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