There are numerous factors that motivate the increasing complexity and dynamism that increasingly characterize business continuity and modern supply chains. Customers and end users want more speed and transparency, while buyers face the logistical and legal challenges of globalization. The expansion of supplier networks results in supply chains covering much greater distances, which implies different jurisdictions and business cultures.
To this complication we must add trends such as the customization of processes and the great speed at which technology advances. Developing more dynamic and global supply chains has many advantages. They allow companies to access a much wider selection of materials, experience, resources and customers.
However, this also increases operational vulnerability and leaves companies susceptible to various interruptions. As a buyer, you may have a business continuity plan to ensure you are always prepared for any unforeseen delay or problem.
But, can you be sure that your suppliers apply the same checks and plan in the same way, can you be sure that each link in your supply chain is as prepared as you?
The importance of a business continuity plan
Creating a business continuity plan means not only identifying the factors that could affect your ability to develop the full potential of your company, but also implementing a response system that protects the interests of business owners. key stakeholders, your reputation and your ability to generate revenue.
To create an effective business continuity plan it is necessary to perform an accurate and methodological analysis of your own business, as well as the rest of the companies on which it depends. If you rely heavily on a specific provider and it suffers a sudden problem, can you meet the rest of your obligations?
The importance of preparing for supply chain disruptions as part of business continuity planning is not an isolated issue that only some companies face. According to the report resilience of the supply chain 2018 the Institute of Business Continuity ( Business Continuity Institute or BCI ), 56% of the 589 companies surveyed have suffered disruptions supply chain over the last 12 months.
The main causes of these interruptions were related to technology; Problems such as the interruption of computer services (53%), cyber attacks and data leaks paralyzed many providers. Other common causes are problems in transportation networks, loss of skills and employees, and adverse weather conditions.
For companies located in the upper levels of the supply chain, the consequences of losing a supplier can be serious. BCI figures indicate that 62% of companies are harmed at the economic level, but the consequences at the logistics and image levels can also be costly. While 52% suffered a negligible loss (below 50,000 euros), for an unfortunate 8% this reached the exorbitant figure of between 1 and 10 million euros.
With so much at stake, one would expect buyers to insist on vendor validation and only work with suppliers with a solid business continuity plan. Although more and more companies integrate business continuity into their processes, 30% of companies currently do not analyze the source of interruptions in their supply chain, which is a serious error. Knowing your supply chain perfectly is an essential step to ensure you make sure your business can avoid taking the worst part of these costly interruptions.
Audits and supply chain resilience
One of the keys to understanding the resilience of your supply chain is knowing to what extent your suppliers are prepared. Our audits are a fundamental tool to help you and your suppliers understand in which cases you could be exposed to risks.
Audits help providers demonstrate their credentials and capabilities in a manner susceptible to external verification and form an essential part of our communities. They help buyers and suppliers work better together thanks to the trust and credibility provided by high quality and accurate data.
The pre-selection questionnaire that suppliers complete before joining our communities is an important validation check, but it is during audits that this data is actually verified. Buyers can create stronger supply chains that resist impacts and disruptions much better by working with companies that have a proven track record. For suppliers, the fact that the rest of the community can access audit information can help them get new contracts.
Not only do we pre-select the suppliers; Our audits also offer buyers an excellent level of perspective and knowledge of their entire supply chain.
Business continuity planning involves waiting for the unexpected and knowing what you will do if something happens that interrupts your operations. But what is the point if you cannot access the goods and services you depend on? You have to make sure that your suppliers are also able to continue with the operations in case of an interruption.
