KNOW AND MANAGE YOUR SUPPLIER SECURITY RISK DURING COVID-19
Manage your Supplier Security Risk
The novel Coronavirus has created a number of challenges for society and most organisations are not well prepared to cope with this pandemic and the impact that it has on their trade. The world is grappling with the humanitarian and economic effects of the outbreak, including the containment measures that are being implemented by governments across the globe.
Many industries are being directly influenced by social distancing policies, travel restrictions and lockdown controls,put in place to reduce the spread of the virus and “flatten the curve”. The harsh reality is that these restrictions are placing huge amounts of pressure on businesses, the survival of our livelihood requires that we learn new ways of living and working and this includes working with suppliers to maintain service delivery.
“Suppliers can make or break your business, a company is only as good as its suppliers, if they let you down, you let your customers down.” Says Lee Bristow
Below are four fundamental steps that they recommend companies to follow in order to manage the risks associated with the pandemic and the impact that it has on your supply chain.
1. Identify your Major Suppliers
The starting point for managing your supplier risk is to create a full and detailed list of all your suppliers. This will be used to “triage” your suppliers in order to identify those you are most reliant on and most severely impacted by during the current trading conditions. It is important not to overlook smaller suppliers who may be no less critical. The company’s payment system is often a good place to identify active suppliers. Consider all of the following functions in your business as a start
- HR and payroll suppliers
- Software and IT suppliers
- Consultants and independent contractors
- Operational third-party vendors
- Marketing suppliers
2. Assess and Risk Profile your Suppliers
Triaging your suppliers allows your organisation to assess and assist the suppliers that you are most reliant on, it enables you to identify the suppliers that are severely impacted by the pandemic and the current restrictions that are in place.
Supplier profiling can be done by setting up a list of questions that are sent to the supply network. This survey will then establish whether these suppliers have measures in place to ensure continuity of service as well as to protect the health and best interests of the company.
The profiling assessments help gather data relating to the criticality and possible impact related to suppliers as well as the current mitigation and resilience in place for the service that these suppliers deliver. This assessment calculates the level of risks associated with each supplier (low, medium and high).
By surveying suppliers within the context of the pandemic, valuable insights may come to light that could mitigate the effects of existing and future service delivery and supply chain risks, ensuring your business is able to continue to deliver customers.
3. Supplier Security Risk Management Report
Once the questionnaire has been completed, a full report will be made available, highlighting the key risks that have been identified during the assessment.
4. Remedial Action
Based on the outcomes and findings in the report, companies can then act quickly to minimise the risks to their supply chain as a result of the COVID-19 pandemic.