particular . Even in the context of inflation or a recession , this will best ensure a company ’ s supply chain has been mapped to help minimize future disruption , providing lasting savings to companies in the long-term .
Geopolitics continue to undermine established supply chains
As we have seen over the past year , geopolitical developments in Ukraine as well as lockdown policies employed by China to combat Covid-19 have impacted supply chains profoundly . Now , many businesses are adopting a China-plus-one strategy to mitigate exposure to political decisions and diversify away from China . Establishing a mature supply chain resiliency program is key to mitigating risk from geopolitical events . Such a program should include real-time event monitoring and alerts , as well as supply chain mapping down to part origin for single-sourced parts to give the greatest insight into potential emerging disruptions and supply weaknesses ahead .
In order to have a secure supply network , it is crucial that companies establish a supply chain resiliency programme that not only maps suppliers down to the part origin level , but one that also prioritizes risk mitigations based on revenue impact , rather than by spend . Whilst the traditional approach focuses on the top 20 percent of suppliers that make up 80 percent of the spend , this leaves procurement teams with little to no visibility over the other 80 percent of suppliers - the overwhelming majority of a company ’ s supply chain ! This extremely risky approach should therefore be avoided , and attention should instead turn to the suppliers your organization has no visibility over which tend to be lower-spend .
Building supply chain resiliency is a very effective way for companies to prepare for and minimize disruption in 2023 - taking the focus away from costly crisis management towards a more considered approach . By taking a proactive attitude , supply chain risk management is then viewed across the organization not as an operational burden , but as the foundation of a secure and resilient supply network . ■
Bindiya Vakil www . resilinc . com
Bindiya Vakil is the CEO and founder of Resilinc and is an award-winning expert in supply chain risk management . Crowned Supply & Demand Chain Executive ’ s inaugural Woman of the Year in 2020 , Bindiya ’ s career spans 20 years . She holds a master ’ s degree in supply chain management from MIT and an MBA in Finance . Bindiya continues to lead the market in risk intelligence and mitigation and is credited with bringing supply chain risk management into the mainstream . Resilinc was founded with the purpose to strengthen global supply chains , making them resilient , sustainable , transparent , and secure . Since its launch in 2010 Resilinc has defined the supply chain mapping , monitoring , and resiliency space and is widely considered the gold standard for supply chain resiliency , worldwide .
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