SCM Insights
January 26, 2022

Supply chain resolutions 2022: (3) reduce supplier risks

Matching themes: resolutions 2022, Risk Management, security of supply, supply risks

With the rise of global temperatures comes a rise in risk of extreme weather and natural disasters. Their impact on supply chains needs to be anticipated before it's too late
With the rise of global temperatures comes a rise in risk of extreme weather and natural disasters. Their impact on supply chains needs to be anticipated before it’s too late

With climate change, weather hazards are becoming more likely. And with this, the risks for supply chain disruptions are increasing, too. Resulting large-scale power outages could bring production facilities at suppliers to a standstill. Or their plants themselves could be damaged by severe weather or forest fires.

The year 2021 has unfortunately confirmed this trend and put even more strain on already struggling supply chains. In the future, we can most likely expect even more frequent, even more serious natural disasters in even more places.

This makes it all the more important for supply chain managers to understand the geo-risks to their supply chains — both current and future.

Identifying geo-related risks for material flow and production

Using data from international reinsurers such as Munich Re and Swiss Re, SupplyOn Strategic Risk Management provides all relevant information. From earthquakes and volcanic eruptions to tornadoes and hailstorms to floods or forest fires, the system covers all forces of nature and weather. Additional risk information from other sources or your own risk categories can also be easily added.

Supply chain managers can see with a glance on the map which supplier plants are particularly at risk. They also know straight away which articles are affected in case. As a result, they can quickly identify which plant- or material-related risks are lurking in their supply chain.

Targeted risk mitigation

Now, this allows for initiating targeted measures to minimize these very risks. One example would be to agree specific safeguarding measures with suppliers. Another option is to consider this risk information specifically when selecting and evaluating suppliers. Ideally, both should be done.

This creates more resilient supply chains. That is, supply chains that are ready for the geo- and climate-related challenges of the future.

Learn more about this here.

My tip: SupplyOn Strategic Risk Management is also great for visualizing the impact of short-term (political) events on your supply chain. No matter if it is a lockdown, a large-scale power outage or a border conflict: Affected regions can be quickly and easily added to the maps as a separate risk layer, so that you can see early on how this will impact your production.

Further resolutions for 2022:

Tim Schumacher

Manager Product Development Visibility & Analytics

Together with my team, I am responsible for designing and implementing innovative and cloud-based solutions. In addition to the detailed calculation and visualization of strategic and operational KPIs, our applications uncover potential impairments in your supply chain at an early stage. This allows you to mitigate capacity bottlenecks, delivery delays and other problems in a timely manner.

For implementation, we use the latest technologies in the areas of big data, artificial intelligence, and machine learning, as well as customized integration solutions for your data interfaces.

Here in the SupplyOn blog, I will keep you up-to-date with latest challenges and solutions in our field.

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