Recent events prove that the need for supply chain risk management is huge. Especially as many brace for the Atlantic Hurricane season which begins Tuesday.
In March, the Evergiven, a vessel the size of a major skyscraper, was stuck in the Suez Canal, one of the world’s most important bodies of water. According to the BBC, the damage to global trade from this unexpected traffic jam was estimated at approximately $9 billion a day or $400 million an hour.
That’s staggering. It highlights the need for supply chain risk management, especially as many Americans brace for the 2021 Atlantic Hurricane season, which begins Tuesday.
Companies need to step up their focus on smarter, more resilient supply chain management in advance of the next disruption. They need to minimize risk and maximize opportunities to deliver goods ethically and timely, no matter what disaster strikes next. Weather events, another global pandemic, cyberattacks, power failures, or incidents like the Suez Canal one can all cause major supply chain disruption.
The need for supply chain risk management
For starters, disruptions of one kind or another impact the global supply chain beyond the initial shock. They often have lingering impacts to businesses. For example, Maersk, a leading integrated shipping company, said it could be “months” for normalcy to resume in the wake of the Suez Canal blockage.
This should only further convince decision makers that supply chain risk management tools are increasingly important to manage direct/indirect spend and overall business strategy. The tools also help maintain strong customer satisfaction in a world where transparency matters more than ever.
It may be hard to comprehend, but some parts of Puerto Rico are still reeling from the horrific impact of Hurricanes Irma and Maria, which struck in 2018. This is mind-boggling and further proof of why intelligent supply chain visibility is critical.
It’s needed across upstream and downstream products, locations and global track and trace, material traceability, and freight collaboration to help maintain smooth operations during normal times and more importantly, during times of unexpected disruptions.
Dangerous hurricane forecast, fortify the global supply chain now
The 2021 Atlantic Hurricane season is already forecast to be dangerous, marking the sixth straight year of above-average hurricanes and storms. The global supply chain industry can leverage technology to ensure the smooth supply chain operations.
Think about this: The need to harmonize of data sources across procurement, design, supply chain, logistics, asset management and finance domains has never been greater. Without this harmonization, businesses may face questions from customers and key stakeholders when they can’t quickly pivot in times of crisis.
This enterprise and supply resilience could lead to better relationship management and more collaborative ways for people to be the best versions of themselves and augment their skills with intelligent technologies.
Having an extensive partner ecosystem and real business process intelligence can help business optimize operations. Without a doubt, the Suez Canal incident truly underscored why business leaders need crisis contingency plans to help them manage more strategically and efficiently. This is where intelligent spend management can be a real driver as part of any supply chain resiliency conversation.