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2021 was another busy year for supply chains and business continuity risk all around the world. Beyond supporting colleagues and customers throughout the pandemic, businesses have also faced increased competition and growing pressure from buyers and suppliers to deliver despite supply chain disruptions, in addition to ensuring the overall customer experience is positive, safe, compliant and transparent.
Commodity prices have increased 68% since January 2021
The Achilles Supply Chain Resilience Index (ASCRI) evidenced that commodity prices have increased 68% since the start of 2021 and detailed that 28% of disruptions are caused by supplier failure throughout Q3 into Q4 meaning supply chain risk continues to remain in the high-risk range.
Physical goods demand is becoming increasingly constrained in the ability to supply on a global scale. Organisations are becoming exposed to any type of supply disruption or unexpected demand increase without the ability to mitigate these risks in advance.
Read our 5 Supply Chain Management trends to watch out for in 2022:
1. Supply Chain Risk Data Modelling
Developing a supplier risk model that is in line with procurement and meets the needs of the business in times like these, to help minimise threats and the associated impacts.
Without the right supplier data at your fingertips, it becomes a lot harder to act effectively on the potential risks your business faces. By collecting and verifying the right information buyers need, we not only sharpen their reaction times, we enable them to be more proactive in managing third-party risk too.
2. Digital Transformation
The digitalisation of supply chains brings with it a high volume of data that must be analysed so it can be used correctly. This increases supply chain integration efficiency processes, operations, and facilitates the decision-making process.
When properly managed and implemented, supply chain digital transformation can add significant value to supply chains across all sectors.
Javier Caravantes, Achilles Ambassadors Board Member, and former procurement consultant to petrochemical companies such as Naturgy and Cepsa explains;
“From supplier prequalification, through solutions like crowdsourcing and integrated ‘Source-2-Pay’, the supply chain management needs to be fully digital –and connected– today,”
“Companies that fail to keep up could not only lose track against their direct competitors, but also against smaller, more agile start-ups who are able to understand the power of digitalisation and challenge the economic strength of traditionally-managed businesses”
Society will continue to demand environmentally-friendly supply chains and build on the momentum from the COP26 conference in efforts to achieve carbon net-zero targets by 2050. While many companies have incorporated processes in line with this demand, supply in sectors such as industrial manufacturing and construction continues to be seen as a significant source of carbon emissions and pollution.
Reducing carbon emissions offers significant benefits for your business, for your customers, and for our collective future. We have been assisting clients to Measure, Manage and Report their Carbon Footprint with the utmost confidence and drive business efficiency through carbon reduction savings in operational cost and performance for over 12 years. For some of our clients, these savings are in the millions of pounds per annum.
4. Supply Chain Cyber Attacks
Supply management is increasingly concerned about cyber security, .
Early in December 2021, the Catalan government suffered its worst distributed denial of service (DDoS) cyber-attack ever. In the space of a few hours, attackers routed large volumes of data to the Generalitat’s information systems, representing 100 times more traffic than it would typically receive within the same timeframe.
Serious Cyber Attacks
In late December 2021 Norwegian media company Amedia suffered a cyber-attack that shut down its computer systems alongside potentially leaking customer data which in-turn prevented the company from printing newspapers.
The trend to invest in cyber security is growing and there is increasing concern about suppliers, given the high level of dependency.
Supply chain attacks rose by 42% in the first quarter of 2021 in the US, impacting up to seven million people, according to research. Analysis of publicly-reported data breaches in quarter one by the Identity Theft Resource Center found 137 organisations reported being hit by supply chain cyber-attacks at 27 different third-party vendors.
Public exposure of confidential customer information
As cyber-attacks pose an increasing threat to supply chains, it’s important for both buyers and suppliers to make sure their businesses are prepared. A Government Cyber Security Breaches Survey revealed four in ten businesses (39%) and a quarter of charities (26%) report having cyber security breaches or attacks in the last 12 months.
That’s why we partner with cyber risk expert Orpheus, to deliver cyber scores for suppliers, to indicate the level of cyber risk associated with an organisation. The higher the score, the higher risk a company faces of being the victim of a successful attack, so understanding your cyber score will allow you to take action to mitigate any issues identified, safeguarding your business from potential attacks.
5. Raising ESG standards
Environmental, social, and governance (ESG) will forge ahead as a 2022 priority in efforts to achieve a more sustainable supply chain. The COVID-19 pandemic put an intensifying spotlight on climate change, and emerging social movements have all given rise to more socially and environmentally responsible consumers. As a result, we’ll see both buyers and suppliers being more transparent with their ESG practices in the coming year, as transparency speaks volumes to the interests of socially conscious investors, buyers and customers.
Buyer and supplier organisations need to take charge of their supply chains to gain a competitive advantage over their rivals and reduce their risk level at the same time.
To find out more information about the five supply chain management trends 2022 or to understand how we can help your business? Request a call back from our team of experts.