Adapting to Change While Mitigating Risk to Supply Chains

It’s a very strange yet compelling time for digital transformation – many businesses have shifted a significant portion of its employees to remote work and now, more than ever, organisational transparency is critical. Most organisations right now are thinking about continuity.

How do we stay alive during this time and come out even stronger on the other side?

This is the time to empower your team to get ahead of this crisis and help your business reshape its roles, its processes, and its purpose. At the heart of this fundamental shift are people, as they now face extraordinary circumstances and are instrumental in adapting to change. We should lean into our relationships with our suppliers to try to better understand them and help them prevent the risk of solvency. When seeking alternate sources of supply, it’s important to not make rash decisions and take the time to carefully evaluate potential suppliers.

Due to the rapid rate of change in terms of news developments, global impacts, and legislations across borders, it’s important finding reliable information and guidance. SAP recently hosted a series of virtual forums called 2020 Adapting Strategies in a Changed World, with industry-specific episodes to guide businesses during this evolving situation and help utilise the latest technologies for adjusting, adapting, and thriving.

I was one of the presenters for our retail and consumer products episode exploring supply chain risks and modern slavery – two vital focuses in our changing world and evolving situation.

With Australian Parliament passing the Modern Slavery Act 2018, a national Modern Slavery Reporting Requirement (Reporting Requirement) was entered into force 1st January 2019. Annual reporting now require statements regarding modern slavery and technology plays a key role in mitigating its associated risks. As businesses are starting to work with new suppliers to secure alternate sources of supply, it’s never been more important to take a closer look at the suppliers you’re working with today and establish a rigid onboarding and risk mitigation process for suppliers you plan to work with in the future.

Every business faces four primary risk categories: Operational risk, Financial risk, Legal risks, and Environmental/Social risks – which is the category where modern slavery falls. It’s important to not just do enough to be compliant with the legislation but do your part to help make the world a better place by not doing business with suppliers potentially engaged in modern slavery.

From Supply Chains to Supply Networks
The impact of COVID-19 has resonated across industries and supply chains, particularly as governments tighten restrictions of the movement of people and goods. Beyond the shifting availability of human resources, supply chains are under great strain to meet changing consumer demands.

Businesses that invested in digital platforms and intelligent technologies have been better equipped for this crisis, utilising demand management systems to navigate through this transitional period. The ability to quickly collate, access, and action useful data can help businesses highlight vulnerabilities in real time while presenting alternative options.

Organisations everywhere should be using this opportunity to lean into supplier relationships, reach out to your supply chain and build deeper connections. This is about transforming your supply chain into a supply network, diversifying your supplier network to mitigate risk and create a wider view of your market, industry, and partnerships.

Technology facilitates collaboration and transparency across supply networks as cloud-based solutions offer streamlined processes and communication platforms. Transparency not only helps establish trust within supplier relationships, but helps companies remain legally compliant and flexible to change.

Platforms for Change and Compliance
I’ve seen SAP Ariba offer businesses a self-service model to daily processes and information, simplifying the way organisations can access and utilise critical data. SAP Ariba gives businesses a platform for monitoring supply networks in terms of risks, impacts, and changes – facilitating better collaboration and communication across industries.

In light of COVID-19, we’ve created a free promotion for businesses worldwide to leverage SAP Ariba Discovery, a matchmaking platform for buyers and suppliers. This is the time to break silos across supply chains and industries to create a better connected and more transparent marketplace. This is the opportunity for many suppliers to create alternate revenue streams and business models using SAP Ariba Discovery, and an even bigger opportunity for buyers to find them quickly in this demanding time of need.

As we’re seeing disruptions to supply chains, its critical businesses don’t lose sight of the deeper impacts in terms of risk and non-ethical practices to fulfil the changing demands of this crisis.

The most important element for mitigating risk is ensuring stringent processes for onboarding staff, contractors, and suppliers. This early diligence can prevent any surprises down the line and ensure all stakeholders of your business are aligned with your vision and purpose.

Intelligent technologies can assist business in sourcing the right people and partners. Cloud-based platforms collate data sets regarding different risk categories and determines a risk score based on the nature and severity of that data. SAP Ariba can distinguish by risk type – checking risk factors automatically and early to help organisations go beyond simply asking for supplier assurances.

To learn more about how industry experts are mitigating risks and complying with modern slavery legislation, we encourage you to register for the second in the series of Adaptive Strategies in a Changed World. Register now.