BUSINESS AS UNUSUAL: PUTTING CRITICAL RISK ISSUES IN CONTEXT
R&C: Recent disruptions have substantially impacted small enterprises through to global corporations. To what extent do these events demonstrate how fragile global infrastructures and supply chains can be?
Green: We began talking about COVID-19 in late January 2020 as a supply chain issue first and foremost. While it eventually became a pandemic and business continuity issue, initially it was a supply chain issue. What we are really seeing for the fragility of infrastructure is – and companies are finding this out in a very hard way – you can outsource the process, but you cannot outsource the risk. What that means in a supply chain context is if you rely on a vendor for a good or service to finalise the good or service that you provide to a customer, and something upstream falls down, you have to go to your customer and tell them that you cannot deliver what you promised. The customer is not going to care why. They are not going to care if it was one level up in your supply chain or two or three or four. What they know is that you failed them. Companies need to be mindful as they more tightly integrate supply chains and as they move to more diverse pools of vendors, they must stay on top of what the impact of those vendors will be on their business if they have a disruption.
Jul-Sep 2020 Issue
SAI Global