Act now to strengthen supply chains

Resilinc’s founder and CEO, Bindiya Vakil, warns UK businesses to strengthen supply chains in face of China disruption, with mapping vital to minimise impact


Using data from its EventWatchAI monitoring system to identify ongoing threats to the global supply chain, Resilinc predicts that any halt in Chinese production for over two to three weeks will cause a global ripple-effect which could be felt for months.


Resilinc’s founder and CEO, Bindiya Vakil, explained: “While there has been some stockpiling by companies, the relaxation of China’s zero-tolerance Covid policy means that many manufacturers will face labour shortages and self-imposed lockdowns.


“At the moment the spotlight is on large companies such as Apple and now Dell. However, the impact on supply chains should not just be the concern of big business. The very nature of supply chains being intrinsically linked across the globe and involving organisations of every size, means businesses of all sizes need to act now to strengthen and diversify their supply chains.”


Resilinc has identified key areas of vulnerability that UK businesses should review to strengthen their supply chains.


Mapping: To counter areas of weakness, businesses must first identify them by mapping supply chains down multi-tiers. AI, cloud and enterprise networks make this task easier. Smaller businesses unable to deploy such systems can put policies and procedures in place to map and monitor suppliers.


Size up the impact: Any supplier can cause disruption, regardless of size. Businesses typically pay attention to the top 20 per cent of suppliers, which make up 80 per cent of spend. However, this means a significant risk with zero visibility over the remaining 80 per cent. Unfortunately, some businesses discover the hard way how a small supplier in trouble can clog their operations.


Safety first: Ensuring suppliers are operating to the latest health/safety standards and regulations is essential. Recent EventWatch data found the UK was the sixth most impacted country by factory fires, with 59 per cent of fires caused by faulty equipment and machinery. The impact of such events should not be underestimated. Nearly half these fires caused medium to high levels of damage, plus lost production and revenue.


ESG in the spotlight: Another consideration is suppliers’ approach to environmental, social and corporate governance matters. If an OEM’s supply chain isn’t clean and clear of labour, safety and/or pollution violations the risk is substantial. In addition to misdemeanours negatively impacting the OEM’s own brand and reputation, a supplier’s compliance issue or violation could cause considerable disruption.


Cyber smarts: According to research by Make UK, 42 per cent of UK manufacturers have been victims of cyber-crimes in the past twelve months. With EventWatch cyber-attack alerts up by 90 per cent in the first half of 2022 compared to 2021, risks to supply chain continuity are not slowing. As threats become increasingly sophisticated, more businesses are implementing ongoing measurement of suppliers’ cyber security practices to avoid weak spots. Businesses are treating their suppliers’ networks as an extension of their own cyber security planning and incorporating them into their procedures and processes.