With experts predicting the pandemic-induced global supply chain crisis will continue for at least several months, if not as long as two years, it has become more important than ever to help your clients manage their exposures.
“It continues to be a very challenging time for most businesses in Canada, many of whom are still affected by supply chain disruptions whether they’re operating domestically, cross border or globally,” says Klaus Navarrete, Managing Director & Chief Agent at HDI Global SE Canada.
During the peak of the pandemic, global supply chains experienced unprecedented disruptions, causing countless delivery delays, soaring shortages and surging prices of goods and services. The emergence of more COVID-variants, and threats of further lockdowns and prolonged health restrictions continue to leave supply chains unstable, amidst rising inflation costs and increased consumer demand adding to the pressure on insufficient supply.
“We have seen some sectors impacted more severely than others, including in the retail, hospitality and travel industries,” Navarrete says. “At HDI Global, throughout the pandemic it has remained a priority to support our brokers and work with clients to find mutual solutions to overcome these challenges – something we are committed to continue doing.”
While supply chain woes won’t be rectified overnight, Navarrete says he expects to see “businesses who manage to survive the challenges recovering fairly quickly and adapting to a new normal”.
“The pandemic has served to highlight the inherent unpredictability of the global supply chain, leaving businesses around the world focusing more strongly on supply chain risk management,” he adds.
“We’ve noticed a lot of brokers trying to help their clients more with their risk management strategies and practices to limit their exposures, which have never been more important,” Navarrete says.
Given these challenges, it’s critical for businesses to be able to systematically identify where risks exist in their network, assess the potential impacts of those risks and implement the right mitigation and response or contingency strategies in order to strategically improve supply-chain resilience, he adds.
WHAT TO TELL YOUR CLIENTS
To help brokers talk to their clients, HDI Global offers the following supply chain risk management advice:
5 ESSENTIAL SUPPLY CHAIN RISK MANAGEMENT TIPS
Make risk awareness a priority – Create an environment where staff are empowered with critical information of known and less known risks facing your supply chain, best practices of managing exposures, training staff on risk assessment software and how to prevent and respond to risk.
Enhance cybersecurity – With increased frequency and sophistication of cyberattacks threatening supply chain disruption, ensure that cybersecurity defenses are strengthened, such as training employees on cybersecurity, backing up data, beefing up network security including for remote staff and purchasing cyber insurance.
Regular monitoring – Regularly review the entire supply chain – identify risk indicators, deviations and possible disruptions that will help streamline planning and response to risk. An effective monitoring system can be automated and is one of the best ways to strengthen supply chain risk management.
Enhance environmental risk management – Given the pandemic, it’s more critical than ever to manage environmental exposures within your supply chain. Do your due diligence when choosing suppliers/vendors before contracting them in.
Take proactive steps to improve your supply chain resilience – One of the biggest mistakes companies make is not developing a contingency plan for supply chain risk mitigation. This will include data-driven assessments of all risks along the supply chain, creating a crisis response plan and being proactive like multi-sourcing, near-sourcing and building up inventory.