Published in News

IT needs better supplier chains

by on22 April 2021


Recent events shows they are pretty rubbish says, disaster experts 

Recent events – such as the Suez Canal blockage and logistic problems with COVID-19 vaccine production – have underlined the need for organisations to build more resilient supply chains. According to disaster recovery and business continuity specialist Databarracks, this means working in partnership with suppliers and carrying out joint exercises in order to identify and address weak points before they become a bigger problem.

Peter Groucutt, Managing Director at Databarracks, said: “When a tanker blocks the Suez Canal, it gives a very clear visual of the impact on the supply chain. But the supply chain can also be hampered in thousands of smaller, less obvious ways. The global semiconductor shortage, for example, is being driven by more subtle factors like rising demand and limited manufacturing capacity. It’s a similar story for the PlayStation 5 console, which is proving difficult for consumers to get hold of almost six months after release.

“Cyberattacks targeting the supply chain are also increasingly common. Dutch supermarket giant Albert Heijn saw empty shelves after a ransomware attack hit one of its suppliers, while the fallout of the SolarWinds breach – which has affected a host of private and public sector organisations – still rumbles on.

“Business continuity planning can sometimes be too inward-looking, focusing on incidents that only affect us. The pandemic has shown the greatest continuity challenge is when everyone across the entire supply chain is impacted at once. In business continuity, we often talk of People, Premises, Resources and Suppliers (PPRS). The time has come to give the supply chain the attention it deserves.

“To increase resilience, there are a few major steps to take. The first is to avoid relying on a single supplier. Use two or more suppliers where possible, and also understand suppliers beyond the first link in the chain. For example, there’s limited benefit in using two different suppliers for a component if they are both served by the same manufacturer. This is one of the factors in the semiconductor shortage because several companies are reliant on the same manufacturer.

“Secondly, don’t be reliant on a single geographic area. Local disruptions like flooding and other natural hazards can affect entire areas. Even areas as large as East Asia can be hit hard by major events, as shown at the start of the pandemic.

“Thirdly, one area where not enough organisations work to improve resilience is carrying out business continuity exercises across the entire supply chain.

“This can be difficult as there is always a customer-supplier relationship, but in these exercises, you need to work together as one team. Get everyone around a table and put a scenario to the group. What would happen, for example, if a tsunami hit? What would happen if the provider of logistics software was breached and paralysed the entire supply chain? How would we continue to transact and get our products out to market?

“It’s vital suppliers are honest and willing to share potential shortcomings as part of this process. A small supplier might be responsible for a highly critical component for a large company, without which the large company can’t ship its products. Small companies should be vetted properly to check their ability to deliver during a procurement process, but they likely won’t have the same expertise in risk and business continuity that their large customer has.

“To really work together as a team, the larger companies need to be willing to help their smaller suppliers improve. By helping them, they’re improving their own resilience too, and everyone benefits in the long run”.

Last modified on 22 April 2021
Rate this item
(1 Vote)