It’s late May 2020 which means there’s a lot of commentary about how the COVID-19 crisis will impact global supply chains and the contingency planning reviews that will need to happen. Most of it centres on ‘resilience’ and what companies should do to deal with a similar, and perhaps even more prolonged, situation in future. If we work from the basis that resilience is best described as being both an ability to ‘bounce back’ from a disaster and to adapt, shouldn’t we be putting some distance between definitions and expectations of resilient supply chains versus alternative supply chains?
Since 2010 Ecodesk has worked with major corporations to embed sustainability into their supply and, through various projects, we’ve got to know what a resilient supplier looks like. They’re not cash-rich monolithic enterprises. For the most part, they’re SMEs who have to think and act innovatively. They’re typically lean and operationally efficient without the weight of multiple layers of management bureaucracy to slow them down. That makes them, almost by default, highly agile and more capable of adjusting their processes to respond alternatively in times of crisis. We also find that their agility often masks a deeper, more organic set of processes that behave in response to a surprising number of ESG variables. A sustainable supplier is, therefore, almost certainly a more resilient one – sustainability forces you to think about a wide range of aspects and impacts on your business. You need to consider the implications of inefficient resource consumption, circularity, energy use, working conditions, product lifecycles and all the while keep innovating your business processes and your products. Whilst it may not be obviously contained under the heading of ‘sustainability’, empirically we’ve seen that suppliers have adopted measures independently which has made them more resilient. However, there still remains a lot more that can be achieved in the delta between customers and suppliers.
The primary focus areas for the majority of buyers are – understandably – price, quality and delivery. No business can afford to overlook this in its procurement processes. Simply shifting purchasing from one supplier to another represents a very weak proxy for resilience, after all in the case of a pandemic or other global issue (one could immediately draw parallels to climate change) everyone gets affected. Here are some supply chain sustainability steps you might consider building into your supplier ‘resilience’ strategies;
Building resilience is not an overnight task, it takes patience and commitment. The world is becoming increasingly exposed to new risks and now is the chance to build a different type of resilience – one which is not necessarily about being able to switch between suppliers but one that embraces collaboration. A prosperous global economy requires us to tackle the cause rather than respond to the effect and make good use of the information that exists around us.
Resilience means embedding a ‘can do’ attitude amongst teams who are well equipped to deal with the ups and downs of an uncertain existence. This makes them, almost by default, highly agile and more capable of adjusting their processes. They don’t suffer from multiple layers of management bureaucracy or complex, multi-stakeholder strategies. As a result, they probably provide the best possible opportunity for large enterprises to be the vanguards of “build back better”.