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Future for Supply Chains Starts with Partners

Posted on by David Priestman

A new future for supply chains starts with your partners, writes Scott Lehmann VP of Product Management at Sphera.

The last few months have been busy for every CEO of a global business. The launch of increased tariffs by the US has added new complexities to global trade. Firms have been forced to take fast action to shore up their supply chains, ranging from stockpiling in warehouses to rethinking the locations of suppliers and networks around the world. While it’s still early days, the impacts are starting to be felt further down the chain of business’ operations. China’s response with additional export restrictions on rare earth metals even forced some automotive manufacturers to temporarily shutter production.

Disruption is clearly becoming the new norm. It is worth remembering that supply chain resilience is not a new topic for 2025. We have lived through five years that have seen events that have profoundly tested global supply chains, including the once-in-a century COVID-19 pandemic and the Ever Given incident on the Suez Canal – the latter of which obstructed up to $10 billion cargo per day.

Scott Lehmann, Sphera

Building resilience into supply chains is no longer a nice to have, it’s an imperative. Businesses need to prepare for the unprecedented and strategically plan for intelligent, proactive supply chain management.

No more reactive

It is critical for leaders to, as the saying goes, see the wood for the trees. Organisations should resist reacting too quickly to the turmoil the tariffs have created worldwide. It may only exacerbate the issue, kicking off even larger unforeseen supply chain disruptions and vulnerabilities.

There is an alternative path available to them. This strategy is centred around supply chain risk management. Risk is not something to engage with after the fact, or on a case-by-case basis. It should be foundational to every firm’s supply chain strategy. These risks are diverse and should be viewed in holistic terms. The risks do, certainly, involve exposure to large tariffs that risk forcing them to hike up prices for their direct customers. They could also be tied into climate regulation, geopolitics, sanctions, human rights, reputational – the list goes on.

Supply chain risk management is guided by principles that aim to avoid, mitigate, transfer or accept risks in order to effectively manage overall risk exposure.

To start, look at a prioritization of suppliers to better understand the risk, its impact and what mitigation strategies are most appropriate. This is a complex, multi-faceted exercise. Too many corporations engage with this question on a surface level. They might try to map out where their suppliers are operating, who their suppliers, and their suppliers, are buying from so they have a more complete picture of their risk posture. Our research shows that, for the majority of businesses, their intelligence ends at their direct, tier 1 suppliers. Firms are not going deeper in the layers of the supply chain and thus are exposed to risks they may be unaware of.

Factors behind this problem range from outdated and/or new technology promising the world but delivering a lot of noise and confusion to problems in cooperating on supplier data with direct suppliers. Solving it requires a shift towards real-time supplier intelligence, extending beyond immediate partners to include true N-tier visibility, ensuring businesses understand the risks deep within their networks.

Looking ahead

Taking a more proactive, modernised approach to supply chains is critical. Supply chain resilience is a necessity for business survival. Companies can no longer prioritise cost efficiency over resilience. Firms need a holistic view of supplier risk, built around real-time supplier intelligence that goes far beyond immediate partners to achieve full N-tier visibility.

It will help firms to comprehensively ask the biggest questions affecting supply chains today including: Who am I doing business with all the way down the supply chain? Is there a diamond supplier risk? What specific country risk exposure do they have in their sub-tiers? Are there human rights issues in their supply chains? To what extent are they exposed to the new US tariff regime? How are they affected by EU climate regulations? Do they have exposure to sanctions from the war in Ukraine? How will the ongoing Middle East conflicts impact them directly and indirectly?

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Supply Chain Resilience from Transparency and Collaboration

 

 

Don’t Leave Climate out of Risk Management Process

Posted on by Keith McKinley

Can businesses afford to leave climate out of their risk management process? Kevin Vranes, Chief Product Officer of Worldly, is a specialist in climate science data and discusses here the growing risks to supply chains and how businesses are using supply chain data to strengthen risk management, avoid financial losses, and uncover growth opportunities.

While the SEC’s recent decision and EU Omnibus CSRD updates to ease disclosure requirements may have companies rethinking their next steps in measuring their supply chains emissions, it’s critical we remember that a company’s supply chain footprint has always been about more than just compliance. Companies that don’t capture supply chain impact data expose themselves to a much bigger risk: disruption.

Extreme weather, resource scarcity, and geopolitical instability are hammering global supply chains, and the companies failing to integrate climate-related risks into their logistics strategies are the ones facing the most serious financial threats. Adding to that, the latest McKinsey Global Supply Chain Leader Survey suggests companies are easing their focus on supply chain resilience — just as they should be doubling down.

The World Economic Forum’s Global Risks Report ranks extreme weather as the second-most severe risk for 2024-2025, with nearly all environmental threats appearing among the top 10 long-term risks. The truth is in the numbers. Only 28% of companies reported diversifying supplier base to diminish critical exposure to climate risks in their supply chains. Even more problematic? The economic risks of climate change to global trade are projected to reach approximately US$81bn in 2024 alone. To add to that, the sheer scale of potential impacts and the vast infrastructure investments required to mitigate them could overwhelm societies’ ability to adapt, leaving some communities and nations unable to withstand both the immediate and lasting effects of a rapidly changing climate.

Leveraging data to mitigate risk

Traditional risk management approaches often fall short when it comes to logistics. Companies relying on historical trends and broad-stroke contingency plans are being blindsided by increasingly volatile disruptions. The missing piece? Real-time, primary data that provides full visibility across supply chains. Companies have the data they need to understand the impact natural disasters could have on their supply chains – but how can they act on it?

Understanding the potential regional risks to supply chains enables companies to predict the hotspots that could cause issues down the line before they become critical disruptions.

The secret weapon in a corporate toolkit

For businesses operating in an increasingly volatile global landscape, integrating climate-related risk into logistics and supply chain operations isn’t just about avoiding losses — it’s a strategic advantage. Companies that fail to account for these risks face growing threats to profitability, from supply shortages to increased costs and reputational damage. On the other hand, businesses that proactively adapt — by leveraging climate risk data, diversifying supplier networks, and integrating sustainability into their operations — can turn these challenges into competitive strengths.

Beyond risk mitigation, companies that prioritize supply chain visibility can gain a serious competitive advantage. Supply chain disruptions aren’t just a cost center; they’re a direct threat to market position. Companies that treat supply chain data as a strategic asset — not just a compliance requirement — will be the ones that succeed in an increasingly unstable landscape. Climate-related disruptions aren’t a hypothetical future risk. They’re here. And businesses that aren’t using data to build resilience into their logistics operations are already losing ground to those that are.

If the last few years have proven anything, it’s that global supply chains are operating in an era of compounding crises. Compliance deadlines may be shifting, but the financial stakes aren’t. The choice is clear: use data to future-proof logistics — or pay the price for flying blind.

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Building Resilience in the 2025 Supply Chain

 

Supply chain fraud – the dangers of extended credit

Posted on by David Priestman

Fraudulent strategies can prove extremely profitable to the international criminal fraternity and the global supply chain is typically low risk due to the remote nature of the actual physical theft of goods. The TT Club regularly highlights the risks of theft through fraudulent documents, mandate fraud, fraudulent truckers, and trucking companies presenting themselves to collect cargo and more recently fraudulent freight forwarders or brokers.

Now the insurer is drawing attention to another type of fraud prevalent over the last twelve months; that of credit fraud. TT’s Logistics Risk Manager Josh Finch comments, “Credit fraud is an exposure to all in the global supply chain and a danger that ought to be considered through the risk management structure of every business. This is primarily a financial risk as operators are left with freight costs that can’t be collected. The losses as a result of such fraud can escalate quickly.”

The methodologies of criminals may vary but they all prey on the priority of all operators to maximise revenue in a highly competitive commercial environment. A brief example can help illustrate the dangers.  Finch explains, “A new customer approaches with a single shipment, typically to transport internationally, for instance from Bangladesh to Spain. The ocean shipment will be completed by road at source and destination.  There is a suggestion this could be the start of a potentially large and lucrative contract.   A rate is agreed and a 60-day credit facility arranged. On completion of the shipment the freight account is settled within the agreed 60 days.”

What follows, from the operator’s point of view seems favourable, as four more consignments of clothing are booked on similar terms to the first. Then the ‘sting’ is put in place as these consignments become urgent and must be sent by air.  Several more air freight shipments occur regularly over a three-week period.  All successfully delivered.

However after that, communications to the customer go unanswered; the 60-day credit period expires, and the freight account goes unsettled. The operator is left with significant carrier costs and no revenue.

TT urges operators to engage in extensive due diligence when advancing credit to new customers and points to advice from the British International Freight Association (BIFA).  Based on the unfortunate experiences of a number of its members, BIFA highlights some similar characteristics shared by this type of fraudulent ‘customers’ :

  • Customer wants only airfreight handled
  • No customs clearance or delivery at destination required
  • Completely new contacts, never previously engaged with operator
  • Large volumes of cargo involved
  • Customer accepts the quote without negotiation
  • No record of customer ever importing or exporting previously on the UK’s HMRC Traders website

Concluding Finch emphasises, “Undoubtedly the best course is to withhold extended credit such as 60 days until a trusting relationship has been established with a customer. If commercial necessities dictate offering a more immediate credit facility then careful due diligence is vital. It is wise to maintain that primary risk management revolves around knowledge of your customer at all levels including regulatory compliance, safety, and security.”

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Continued Risk to Inland Waterway Freight Operations

Posted on by Keith McKinley

There are alarming warning signs says international freight and cargo handling insurer TT Club, that severe climatic events are already impacting inland waterway operations; these impacts are widely forecast to get worse in the future.

2024 was the hottest year on record globally. Reinsurer Swiss Re reported natural catastrophe losses exceeding US$100 billion for the fifth year in succession and with thirty-seven events recording losses over US$1 billion the prior year as reported by the Financial Times, from extreme weather. Estimates forecast that insured losses could double within the next ten years.

In 2024 European waterways continued to experience significant disruption to cargo transport. In June the Rhine suffered from extreme weather conditions with torrential rain leading to severe flooding in southern Germany. Cargo handling was interrupted to/from Switzerland and caused substantial delays in inland traffic between the Lower and Upper Rhine.

Conversely, increased droughts have led to record low water levels on major rivers with some vessels carrying only 25% of their usual load to avoid running aground and causing delays. Shipping lines have had to switch cargo from river to rail to maintain connections between industrial regions and the ports.

“Climate change effects on river navigation are significant as it is highly sensitive to changes in weather patterns and long-term climate trends,” says Neil Dalus from TT’s Loss Prevention Department. “This challenge highlights the vulnerability of Europe’s inland waterway transport system, emphasizing the need for infrastructure improvements, planning for risk mitigation and workforce training to ensure operational resilience.”

TT’s historical data points to an continuing rise in claims from weather-related losses over the last ten years. These result from numerous types of damage from navigational and berthing accidents to collapse of cranes and port equipment collisions to container stacks blowing over, and of course flood damage to buildings and infrastructure.

Uninsured and consequential losses can also be costly reports Dalus, “As a result of operational delays reputational damage can occur. Emergency supplies and additional labour costs can accrue and increased maintenance, training and management downtime have to be factored in.”

TT is determined to emphasise the need for a focus on climate change resilience measures; to sharpen detailed awareness of such risks that, with undeniable global warming are clearly set to increase. Additionally as a mutual insurer TT will work in assisting inland waterway operators to devise loss prevention strategies to help minimise the future costly consequences of weather-related incidents.

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Cyber Security Risk for Supply Chain Software

Posted on by David Priestman

BlackBerry Limited has revealed new research exposing the magnitude of software supply chain cybersecurity vulnerabilities in the UK public sector. More than half of UK IT decision-makers across healthcare, education and government organisations received notification of an attack or vulnerability in their supply chain of software in the last twelve months. Worryingly, it took more than two in five of organisations more than a week to recover.

The survey of 200 IT decision-makers and cybersecurity leaders across the UK comes at a time when critical infrastructure attacks are increasing, particularly those targeting government, education and healthcare industries. As such, the latest BlackBerry analysis drew insights from almost a quarter of the total UK survey respondents across government, education and healthcare to identify the procedures their organisations have in place to manage the risk of security breaches from software supply chains.

The latest findings show that operating systems (38%) and web browsers (17%) continue to create the biggest impact for public organisations. Following a software supply chain attack, public sector IT leaders confirmed a high level of impact in terms of financial loss (71%), data loss (67%), reputational damage (67%), operational impact (50%) and intellectual property loss (38%).

Software supply chain blind spots contradict security measures

UK organisations across government, healthcare and education confirmed having strict security measures in place to prevent attacks in their software supply chain, including data encryption (51%), training for staff (49%), and multi-factor authentication (34%). Meanwhile, almost three in five (58%) public sector IT leaders believe their software supplier’s cybersecurity policies are comparable or stronger (38%) than those implemented at their organisation. Furthermore, 96% of respondents were confident in their suppliers’ ability to identify and prevent the exploitation of a vulnerability within their environment.

Yet, when it comes to the collection of evidence that attests to a supplier’s level of software security to underpin this level of trust, less than half (47%) of IT decision-makers in the public sector said they ask for confirmation of compliance with certification and Standard Operating Procedures. Meanwhile, even fewer ask for third-party audit reports (38%) and evidence of internal security training (32%).

Additionally, more than half (51%) of respondents had, in the last 12 months, discovered unknown participants within their software supply chain that they were not previously aware of, and that they had not been monitoring for security practices.

Enabling more impactful software supply chain inventories

Encouragingly, many UK IT decision-makers confirmed they perform an inventory of their software environment in near-real time (15%) or every month (28%). However, almost two in five (39%) respondents only complete this process every 1-3 months, while almost one in ten say they complete this process every 3-6 months (9%) or once a year (9%).

However, companies were prevented from more frequent monitoring by several factors, including limited visibility across their software supply chain (53%), as well as a lack of technical understanding (49%), effective tooling (38%) and skilled talent (38%). More than a fifth (21%) also identified a lack of funding as a challenge preventing more frequent monitoring. As such, more than two-thirds (68%) said they would welcome tools to improve the inventory of software libraries within their supply chain and provide greater visibility to software impacted by a vulnerability.

“Our latest research comes at a time when cyber-attacks against the UK public sector are increasing in both volume and sophistication,” said Keiron Holyome, VP of UKI & Emerging Markets at BlackBerry. “As such, pressure is increasing to address software supply chain security vulnerabilities, which is a key focus for the UK Government’s ‘Code of Practice for Software Vendors’, given the huge risk they pose to the services that UK citizens rely upon daily.

“While it’s positive to see more organisations within the public sector proactively monitoring their software supply chain environment,” continued Holyome, “visibility remains a key issue that IT leaders must tackle or risk exposing vulnerabilities for cybercriminals to exploit. Ultimately, how an organisation monitors and manages the security of their software supply chain must rely on more than just trust. Modern AI-powered Managed Detection and Response (MDR) technologies can provide 24×7 threat coverage, empowering IT teams across the public sector to tackle emerging threats in their software supply chain and navigate complex security incidents with enhanced visibility and confidence.”

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Digital Catapult Platform to Solve Supply Chain Setbacks

Posted on by David Priestman

Digital Catapult has today launched the Digital Supply Chain Hub, a platform designed to facilitate strategic collaboration between manufacturers and digital solution providers across the UK. The new platform will meet industry demand to accelerate the digitalisation of supply chain operations, driving resilience and sustainability through the application of deep tech solutions.

Immediately available to businesses, the Hub has been developed by Digital Catapult to tackle problems often encountered during the search for a suitable supply chain partner, such as siloed operations and ineffective information transfer. The platform will remedy these problems by offering bespoke educational modules to address critical skills shortages in the UK, empowering users to leverage the Hub’s matching functionality to connect to businesses relevant to their specific challenge areas.

For businesses keen to commence their digitalisation journey, the Hub will have valuable resources available including tools such as the Edge Digital Manufacturing readiness tool and the supply chain resilience navigator by WMG. Both tools will help businesses to better understand how to make their supply chains more sustainable, resilient and efficient, strengthening sectors including advanced manufacturing, energy, food and drink, and more.

Community forums, known as Circles, will also be a feature of the Hub, encouraging users to engage in meaningful discussions on supply chain challenges such as logistics optimisation, sustainability and risk management. It is hoped that these forums, educational modules and matching capabilities will enhance the UK’s overall supply chain resilience and efficiency, fostering greater understanding of new solutions, and enabling technology providers to scale faster with an enriched understanding of the state of global supply chains.

Solve Supply Chain Setbacks

The launch of the Hub comes as over 60% of most industrial companies’ CO2 emissions originate from the supply chain, encouraging more businesses to explore applications of deep technology to advance industrial sustainability in their operations. The majority of the UK’s logistics industry is also seeking digital solutions to optimise their operations, with 86.5% planning to invest in at least one digital technology solution over the next two years, fuelling demand for the services available on the platform.

Ravi Gidoomal, director of Edge Digital Manufacturing, said: “Navigating new technologies can be overwhelming and many leaders we speak with don’t know where to start or what to do next. Others find it hard to maintain momentum and get their team excited about change with all the other pressing demands on their time. We’ve developed the Digital Supply Chain Readiness course to provide real-life examples and practical actions, helping leaders to take their first or next step to digitalise their supply chains.”

Tim Lawrence, Director of the Digital Supply Chain Hub at Digital Catapult, said: “We are excited to launch the new Digital Supply Chain Hub, reflecting the hard work, dedication and commitment of our team. The platform marks a significant step towards greater collaboration, cooperation and communication in the supply chain sector, fuelling innovation and new ideas. By creating a commercially neutral ecosystem, we will enable industry leaders, researchers, and technology providers to address critical supply chain challenges directly, strengthening critical economic sectors and empowering businesses to apply new solutions to transform their operations.”

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The unspoken risk that’s hitting businesses. Hard

Posted on by David Priestman

Unspoken risk in the supply chain can hurt business, writes Talal Abu Issa (pictured), CEO & Founder of Beebolt.

There’s a predictable lifecycle in public rhetoric when something goes drastically wrong in the supply chain. The situation occurs. It floods news streams with photos, and live updates, and commentary from industry leaders.

Then, the memes start. They fill up social media feeds in a way that’s more often seen after an awkward reaction at an awards show or a celebrity autobiography is released. Eventually, they die down, only to be replaced with the what we can learn from… posts on LinkedIn. And no matter how unrelated the angles may seem, they usually keep the story afloat.

Rinse and repeat

Behind-the-scenes, the cleanup is happening – literally and metaphorically. When a supply chain disaster occurs, we don’t always hear about how much it costs a company, the number of job losses it resulted in, or the environmental impact it’s had. But those facts and stats are still a very real fallout for businesses around the world.

And with globalisation increasing every day, whether or not a brand is impacted by a supply chain disruption feels like luck of the draw. How to stop your business from becoming a viral joke or a cautionary tale? Greater visibility and greater collaboration.

Disruptions: in numbers

No business worth their weight is going to publicise how much a supply chain disruption has cost them. Not even a ballpark. But where the global economy is concerned, we’re swimming in numbers. The widely shared figure from the 2021 Suez Canal blockage was that the incident cost some $9.6bn of goods each day; hardly surprising given the region accounts for around 12% of total global trade.

The Panama Canal is another key trade route that accounts for around 40% of all US container traffic – but one that’s drastically cut traffic since it was hit with drought. According to canal administrators, toll revenues have dropped by about $100 million per month since October 2023. I’ll leave you to do the maths on that one.

Financial repercussions are inevitable when any major disruption occurs. They’re as shocking as they are headline-grabbing, but for real-life businesses run by real-life people, they can have long-lasting effects. Loss of goods, loss of customer loyalty and loss of reputation all hold huge revenue risk. Posing significant threat to individuals down the line of command.

Disruptions: beyond the numbers

You don’t need an MBA to know that any significant revenue loss in a business can lead to job cuts. It’s one of the harshest realities for companies facing repeated or drastic disruptions, and could ultimately put them on the backfoot long-term.

The recent collapse of the Francis Scott Key Bridge was a devastating and shocking image, resulting in the death of six individuals working on the bridge at the time. It also led to the closure of the Port of Baltimore – a port which directly supports more than 15,000 jobs.

It’s easy to think of that as yet another throw-away fact, but given the port is a critical route for millions of tonnes of cargo, long-term closure can put those 15,000 livelihoods in jeopardy. Suddenly, it’s easier to paint a picture of both how important and how fragile supply chains really are. And how much of an impact disruptions can have on global businesses, workforces, consumers and economies.

Disruptions: under the radar

It’s one thing to talk about these large scale disruptions, but they’re happening in practically every business, practically every day. They may be on a smaller scale, but that’s not to say they’re not having an impact.

Siloed communication across a supply chain, missing or misaligned documentation, the inability to track shipments and so on and so on. What can seem like minutiae and every day roadblocks can quickly accumulate to thousands of hours and millions of dollars lost for a company.

Say your Procurement Manager is managing contracts across all collaborators – and an invoice comes through with a discrepancy. They’re tasked with sourcing the initial RFQ and signed contract, understanding why there might be a change of scope (was there an add-on service last minute?), and liaising with internal stakeholders to identify where the misalignment’s come from.

Move too slowly and there’s a risk that the collaborator will halt activity, or that it results in a breakdown of the relationship. Move too quickly and pay the invoiced amount, but risk logging a discrepancy in the company books. Either way: a big no-no.

It’s only one example, but it emphasises just how prevalent siloed activity is across the supply chain. With all the will in the world, a business can have excellent communication and joined-up operations. But that doesn’t mean every party across the chain will be equipped with the same. And where lack of visibility and collaboration starts, disruptions quickly follow.

Prevention. Mitigation. Resolution

With increased globalisation, conflicts, climate change and other market disturbances, the supply chain is bound to become more susceptible to liabilities – as are businesses.

Not every disruption can be predicted or prevented. That’s the reality of trade. But by bolstering their operations, companies drastically reduce the risk. They’re in a better position to protect their bottom line in the day-to-day, cultivate a more unified way of working, and put effective crisis management plans in place. Before they’re hit with an irreconcilable event.

Deploying intelligent technology like Beebolt enables Supply Chain superheroes – your leads, managers and coordinators – to work more intelligently. Any manager or lead can automate the simpler tasks that far too often eat up time and resources, enabling them to focus on the more strategic, revenue-generating work – as well as prevent or mitigate disruptions and their effects.

But as a collaborative tool, the platform acts as its own ecosystem; the more users on the tech, the more data points, the more sophisticated its outputs. Teams can unify communications across the entire chain – something that’s comparatively rare in supply. Track shipments and identify loss patterns. Manage documents and admin, interrogate performance gaps and so on, and so on.

Watching disruptions occur from afar is one thing, but our shared global market is bringing the threat of significant loss a lot closer to home. Whether or not your company is impacted might be luck of the draw. But having operational preparedness shouldn’t be.

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Industry View: Secure Your Supply Chain Now to Beat Disruption

 

Disruptions in the Supply Chain Affect the Automotive Industry

Posted on by Keith McKinley

The automotive industry’s reliance on its supply chain running smoothly is important to ensure the consistent production of vehicles for consumer and corporate demand, especially considering that most vehicles can contain between 15,000 and 25,000 component parts.

Chris Thompson, Operations Director at Electrix International, a global supplier of stainless steel electrical enclosures, has offered some expert insight into the supply chain issues facing the automotive industry, including the impacts it has and posing some potential solutions.

Reduction in workforce

One significant concern in the automotive industry is the significant shortage of laborers and workforce. In fact, an ABB survey of around 600 global industry experts found that skills shortages of talented laborers were of the greatest concern in North America, with 56% of experts outlining it as a problem. 48% also stated that new skills were required to adjust to the fast-changing landscape of the industry, with more needing to be done to attract people to join the industry.

Technology shortage

One significant issue within the automotive supply chain is the shortage of key technological components, like semiconductors, that go into vehicle production. These inventory shortages increase delivery lead times, and the scarcity of parts has forced manufacturers to raise costs, meaning final prices for consumers are even higher than before.

In fact, the cost of a new car in 2024 is now an average of $48,759, which could increase further should these delays increase. Not only does this have an impact on new car purchases but also on the aftermarket industry, as it affects repair and maintenance services being unable to work on vehicles with replacement parts.

Geopolitical and naturally occurring phenomena

It’s not just physical issues that can affect the supply chain, as the wider landscape of the world can have a huge impact on the automotive industry. Geopolitical developments that automotive manufacturers have no control over can cause interruptions in the flow of goods and materials. For instance, Volvo and Tesla had to suspend manufacturing due to the conflict in the Red Sea in early 2024. Conflicts and tensions between countries affect trade and tariffs placed on materials like steel and aluminum, which in turn raises costs for manufacturers. The knock-on effects can have huge implications in the long term.

In addition to geopolitical situations, naturally occurring phenomena and disasters can also contribute to production and supply chain issues for the industry. Whether it’s hurricanes, wildfires, or earthquakes, they’re unpredictable in their very nature and can be hugely disruptive to production facilities and transport networks. The knock-on effect leads directly to supply shortages and delays in production.

How does the industry respond to these challenges?

The automotive industry has been forced to create and implement strategies to deal with these challenges, with one solution being to diversify supply chains, which involves reducing their reliance on single-source suppliers. This means establishing strategic partnerships with multiple suppliers, as well as investing in localized production facilities, and making the most of emerging technologies to streamline and optimize operations.

This creates more flexibility in managing the supply chain to react quickly to the impact of disruptions and continuing with processes despite unforeseen circumstances. The market and industry are constantly evolving, so staying on the cusp of new strategies can avoid major disruptions.

Disruptions within the supply chain have emerged as a significant challenge for the automotive industry, whether it’s geopolitical tensions or natural disasters. The challenges posed to the market have impacted everything from the production of new vehicles to increased costs of units to materials and affecting consumer demand. This is why it’s so crucial for the industry to explore proactive solutions to mitigate these risks and build a stronger risk management strategy.

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Transportation costs drive regional divide

 

Planning for Supply Chain Threats

Posted on by Keith McKinley

New data from intelligent planning technology provider Board International, reveals that senior supply chain professionals are placing a renewed focus on scenario planning in response to a volatile business landscape. According to the new Board 2024 Global Planning Survey, 73% (Global: 71%) of decision-makers are taking planning more seriously, with the Ukraine War, cost-of-living crisis, and ongoing supply chain disruptions acting as key catalysts.

Cyberattacks (Supply Chain Professionals (SCP): 36%; Global: 34%), labor shortages (SCP: 35%; Global: 36%), blocking of key supply chain channels (SCP: 27%; Global: 30%) and fluctuating oil prices (SCP: 34%; Global: 29%) top the list of key business threats that decision makers are currently making plans for.

Despite an emphasis on planning to help navigate this disruption, many supply chain professionals continue to face challenges planning effectively. The survey reveals signs of planning fatigue within many companies, highlighting a 14% decrease in how seriously companies are taking planning compared to last year. Similarly, just over three quarters (SCP: 77%; Global:73%) of supply chain decision makers admit their organization makes planning decisions based on assumptions. Together, these findings suggest that many supply chain professionals are struggling to implement data-driven decision-making. Nearly a third (SCP: 29%; Global: 29%) of respondents report that ineffective planning has impacted profitability, productivity and the ability to drive innovations, new products or services.

From Scanning to Planning

The survey reveals that too many companies are simply scanning for potential crises rather than actively preparing for them. For example, Board found that 43% (Global: 39%) of respondents are discussing rising tensions between China and Taiwan but only 29% (Global: 27%) are actively scenario planning for an escalation in the region. The lesson from Gray Rhino and Black Swan events like the conflict in Gaza or the war in Ukraine highlight how important it is for organizations to anticipate and mitigate the risk of geopolitical, economic and social disruptions, however unlikely they may seem. The survey also found that 72% (Global: 70%) of supply chain professionals usually disregard the most extreme scenarios when planning, suggesting most companies are leaving themselves open to risk should the unexpected happen. And often because it’s too difficult or time consuming for them to do so.

“Industry leaders face immense pressure to navigate a complex and unpredictable business environment. The need to shift from conversation to action around scenario planning has never been more important,” said Jeff Casale, Board’s CEO. “But in far too many cases, organizations remain limited by legacy tools that are prone to errors and siloed data – leaving them vulnerable to costly mistakes and outdated insights. To better compete, they need to be proactive about anticipating disruptive events, modelling calculated scenarios and aligning strategic, financial and operational plans.”

Supply Chain Cyber Security Threats

Adopting an agile and integrated approach to planning is critical for companies to drive increased flexibility, streamlined operations, faster time-to-market and improved collaboration and resource allocation in a rapidly evolving market landscape. However, the survey identifies a concerning agile planning gap that highlights a significant disconnect between aspirations and reality. The survey found that 76% (Global: 73%) of respondents globally believe their organization is equipped for agile planning, but only 14% (Global: 17%) have the right processes and technologies in place to make this a reality.

For companies looking to close this gap, the survey found three key barriers: poor data quality and governance (SCP: 46%; Global: 46%), ineffective processes based on largely manual activities (SCP: 43%; Global: 48%) and a lack of modern tools and technologies (SCP: 42%; Global: 43%).

Underpinning each of these barriers is an overreliance on static spreadsheets. The survey found 57% (Global: 55%) of supply chain planners globally use spreadsheets, like Excel, for at least half of their business planning – a source of potential risk due to limitations caused by manual data entry and lack of real-time data integration. The survey also found that 72% (Global: 71%) of companies fail to consider enough potential future scenarios when planning, which can also leave them unprepared for unexpected events.

Successful Agile Planning

Organizations are looking to AI to overhaul their approach as they shift towards data-driven, agile planning. 41% (Global: 46%) of respondents are exploring machine learning to improve decision-making, while 38% (Global: 44%) are looking to AI-powered business intelligence tools. A third (SCP: 33%; Global: 34%) of respondents also plan to adopt generative AI tools to enhance their decision-making process.

“By embracing intelligent planning tools and agile planning processes, companies can analyze internal and external data to plan for a range of eventualities, to drive more informed, proactive decision-making and improved business outcomes,” added Casale. “Over the next decade, companies that don’t shift to running their business on a fully integrated planning system will be facing an uphill battle.”

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Data Everywhere: AI in Logistics

 

How to Anticipate Supply Chain Issues

Posted on by Keith McKinley

Every industry, from retail to construction, relies on its supply chain for processes and operations to be successful. But with so many moving parts throughout, challenges arising can have a huge impact on the flow of deliveries. This is why it’s important to identify challenges before they grow into a much larger issue.

Wincanton, experts in infrastructure logistics, have provided insight into how to anticipate issues within the supply chain. This means that industries can be proactive about appropriately preparing and addressing them.

The early signs of disruptions

There are many ways that disruptions can occur in supply chains, like natural disasters. With some of the more common disruptions, there are warning signs that you can recognise early with key indicators:

Demand fluctuations

When there are unexpected and fast changes in demands from consumers, clients, or partners for a product or service, it can massively impact stock and delivery schedules throughout the supply chain. This can result from a particular seasonal demand or an emerging trend encouraging more investment.

Unstable suppliers

Supplier stability can be a massive issue throughout supply chains, with financial concerns such as missed payments. Another indicator can be breakdowns in communication with said suppliers.

Transport delays

Whether it’s traffic and route issues that are key to logistics, or lead times increasing, there are plenty of red flags that you can catch early. These disruptions can have a huge impact later down the supply chain.

Geopolitics

Politics can have a significant impact on supply chains, with relationships between countries and their trading and regulations massively affecting transport across borders and markets.

Proactively assessing the risks

Taking risk assessment seriously and proactively by implementing technologies and insights into supply chain processes can help stay ahead of disruptions and concerns with data-driven decision making.

Predictive analytics

Many companies may not realise they have existing data from within their industry of trends, fluctuations, and disruptions that regularly occur. By analysing that data for where particular sticking points are, businesses can make informed decisions and set up adaptable strategies that can flex according to needs.

Collaborative technology

Cloud-based systems have opened the doors of collaborative technologies that provide instant communication tools and offer transparency throughout the supply chain. Making the appropriate investments in collaborative tech can provide seamless communication as well as data and file sharing between businesses, stakeholders, and partners.

Visibility

Knowing where products and materials are within your supply chain relies on end-to-end visibility, which can be solved through effective tracking and monitoring. This can help identify where orders are and adjust to any challenges, thus preventing escalation.

Supply chain resilience, Diversifying

By diversifying the suppliers used and worked with, as well as optimising transport routes, it cuts down on the reliance on a singular source or region. This offers an alternative in the face of challenges that weren’t forecast.

Rolling monitoring

Through monitoring systems being incorporated, more accurate data on performance, trends, and the health of the supplier is produced. Having up-to-date information on the supply chain, as well as regular updates, helps keep strategies ready for change and evolution.

Flexible response strategies

A flexible response strategy is important for dealing with supply chain disruptions, as many issues can still occur despite analysis of the market and trends that occur. Having plans in place that can respond quickly and effectively can make a world of difference. The importance of anticipating and reacting to supply chain disruptions cannot be overstated, which is why proactive analysis and risk management should be prioritised to identify and prevent any stalling.

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Industry View: Secure Your Supply Chain Now to Beat Disruption

 

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