In today’s interconnected business world, can you truly trust your suppliers? This question became painfully relevant when a botched software update by security vendor CrowdStrike caused what’s arguably the largest IT outage in history, affecting Microsoft and millions of Windows systems worldwide.
The High Stakes of Supply Chain Trust
The July 2024 incident highlighted the critical importance of supply chain reliability. Business Insider magazine estimated the worldwide financial damage at a staggering $10 billion. The impact was far-reaching:
- Airlines resorted to manual flight scheduling
- Coffee shops couldn’t process card payments
- Countless businesses faced operational disruptions
This event underscores a crucial truth: every business, including tech giants like Microsoft, relies on its suppliers to deliver quality products and services to customers. But how can you assess your suppliers’ ability to deliver? And what’s your contingency if they fail?
Building a Robust Supply Chain Strategy
Start with a Solid Foundation
The cornerstone of supply chain trust is an effective Supply Chain Risk Management strategy. This approach helps you:
- Choose suppliers wisely
- Ensure they protect your brand as diligently as you would
Ask the Right Questions
Even if it’s impossible to foresee every event that could happen, you should also have a business continuity plan in place. In compiling that plan you should ask yourself some key questions:
- What processes are critical to your organisation?
- Which suppliers support these critical processes?
- What systems are essential to these processes?
- Do you have any single points of failure?
- What plans are in place if a failure occurs?
Remember, honesty is paramount when answering these questions.
Scrutinise Your Critical Suppliers
Don’t stop at your own processes. Investigate your critical suppliers’:
- Business continuity plans
- Availability guarantees
- Compensation policies for breached contract terms
Preparing for the Worst, Hoping for the Best
If a full supply chain analysis seems daunting, start with a simple review of your core business processes to identify weaknesses:
- Identify your most critical dependencies (processes, products, people, partners)
- Imagine scenarios where these aren’t available
- Assess how long you could manage without each resource
- Develop a Plan B for each critical dependency
By thinking the unthinkable, you make it manageable. Our Risk Management services can help you identify and mitigate these risks effectively.
Achieving ISO 22301: A Blueprint for Business Continuity
ISO22301, the international standard for business continuity management, provides an excellent framework for planning. This process:
- Offers a structured approach to business continuity
- Demonstrates that business continuity extends beyond IT availability
- Helps minimise risk impacts on your future success
- Protects your organisation’s business-critical processes and systems
Ensuring Supply Chain Integrity: A Non-Negotiable Priority
While some businesses prioritise contracts and payment terms over supply chain risk, this approach is inherently risky. Every company should scrutinise its supply chain to ensure integrity and resilience. Remember, if something goes wrong, it’s your reputation that suffers first.
Our Cyber Security services can help protect your supply chain from digital threats.
Trust, but Verify
In an era where a single supplier’s mistake can cause global disruption, ensuring supply chain trust is more critical than ever. By implementing a robust risk management strategy, asking the right questions, and preparing for contingencies, you can build a resilient supply chain that supports your business goals and protects your reputation.
Contact us now if you want to be prepared, not unaware
At Risk Evolves, we help businesses of all types think, protect and plan against risk. We can help you balance the risks that pose a threat to your business and capitalise on those that offer opportunity.
Our expert team will help you assess your key suppliers, audit your supply chain and provide you with resilience planning if the worst should happen.
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