It’s been 32 months since COVID-19 lockdowns triggered a run on toilet paper (pun partially intended), demand for webcams skyrocketed, and home improvement plans skyrocketed then stalled due to lumber, labor, and limited appliance availability. These examples and many others were lumped into “supply chain issues” as the default response for product shortages and soaring prices as increasing demand competed for shrinking supply. A local restaurant I frequent created a cocktail named “supply chain,” whose ingredients change regularly, based on what their suppliers have available to ship that week (a tasty way and excellent strategy to turn ongoing disruption into exclusivity).
Today, many of us have resumed a sense of normalcy yet global supply chains remain in a perpetual state of crisis and easily disrupted. So why haven’t companies and agencies been able to fix/repair/restore their supply chains to pre-pandemic levels? The answer is both simple and complex. (Ready for that “supply chain” cocktail yet?) It’s simple in that organizations already know the types of risk events can cause supply chain disruption – natural disasters, climate risk, geopolitics, trade policies, sanctions, and economic factors. It’s complex in that they now must completely rethink supply chain risk and strategy in an uncertain world and account for the impact of external forces that are out of their control.
As the forces fueling the supply chain crisis continue to change, any strategy or plan to “fix” a supply chain that doesn’t factor the dynamic nature of risk or focuses on surviving the current crisis without also preparing for the next potential crisis is an ill-fated quest. As risk professionals expand their scope of responsibility to include both protecting their organization and identifying new opportunities, how they approach supply chain risk management becomes even more critical to business success.
For a deeper dive into the forces continuing to fuel the global supply chain crisis and what risk pros can do to help stabilize the impact of supply chain disruption to their firms, please join me next week at Forrester’s Security & Risk 2022 event in Washington, DC or virtually. My session, “Finding The Single Source of Supply Chain Risk & Other Ill-Fated Quests” in the risk track will take place on Tuesday, November 8 at 2:05pm ET. I hope to see you there and maybe share a “supply chain” cocktail.