Data and digitisation key for healthy supply chain risk management
The failure of supply chains due to the impact of COVID-19 will accelerate the digitisation of supply chains, according to David Piesse, chief risk officer and member of the advisory board for cybersecurity and blockchain company Guardtime.
Speaking in a Swiss Re-curated session titled “De-risking Global Supply Chain: Strengthening Resilience in a time of Disruption” during the SIRC 2020 Re-Mind virtual conference, he said what is needed is end-to-end supply chain digitisation.
“It’s about trust, getting third parties all together in one place, and interoperability,” Piesse said. “You bring the legacy in, you combine it with new technology and you provide trust in the data.
“We need a complete new viewpoint where can see everything going on upstream and downstream from the supply chain and have provenance—meaning we have trust in and understanding of the data right the way through—to enable us to provide evidence, in this case for the insurance industry, as to what has gone on in that supply chain should a liability occur.”
He added that another important factor is providing the key data for parametric insurance.
Speaking at the same event, Donald Kanak, chair of the EU–ASEAN Business Council and chair of Eastspring Investments, the Asia investment organisation of Prudential, noted that the EU-ASEAN Business Council’s annual business sentiment survey found that the region seen as offering the greatest opportunity is the ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam)—a result that has remained consistent over the years the survey has been running.
“We need a complete new viewpoint where can see everything going on upstream and downstream from the supply chain.”
David Piesse, Guardtime
For the first time this year respondents were asked whether they were considering reorganising their supply chains. Almost half (47 percent) said they are. When respondents were asked which area they were looking to for their supply chain in the future, ASEAN came in first, with 34 percent of the votes, and Europe came in second with 20 percent.
“This reflects that people are realising, as they are greening their supply chains, that perhaps some of the alternatives might exist better in Europe,” he said, while also noting that China remained significant, with 17 percent saying they were thinking of China to increase their supply in the future.
Shehrina Kamal, product director, risk monitoring at Resilience 360, highlighted the fact that this year has brought to the fore the full significance of supply chain disruptions and how companies can be impacted by these.
“We’ve been doing a lot of work helping clients to understand what supply chain resilience really means, and what they can do to implement some of those strategies in their supply chains and be more agile in the face of disruption,” Kamal said.
“It is abundantly clear that supply chain disruption will not go away. There might be a pandemic this year and a natural disaster next year, but the core is to be truly resilient and, even if you have another black swan event, be able to cope with that.
“For example, if there is a lockdown in a certain country causing a manufacturing or sourcing problem, what can you do to mitigate the impact? It’s also about considering strategies such as alternative sourcing or using multimodel solutions for transportation.
“We see supply chain visibility as a very important part, because most companies tend to have generally good visibility up to their tier one levels in the supply chain. Most of the disruptions occur in sub-tier levels—and data is important in order to make those decisions,” she concluded.
Main image: shutterstock.com / GarryKillian