Getting ahead of supply chain risks in manufacturing

2023 is predicted to be another unsettling year with more volatility to come. Current supply chain risks requiring attention includes:

• Geopolitical conflicts and sanctions
• Continued Covid-19 disruptions
• Changing regulatory requirements
• Production backlogs and transportation delays
• Increased costs
• Labour and skills shortages
• Inefficient supplier and contractor visibility
• Environmental, Social and Governance (ESG) and responsible practices
• Over reliance on a limited number of third parties
• Legacy technologies and inadequate data
• Multi-layered tiers that result in ‘blind spots’

The key to managing supply chain risk more effectively will mean that manufacturers need to become more flexible and scalable to respond to whatever comes next. To minimise the risks that future challenges could bring, manufacturers should focus on:

• Compliance with supply chain regulations
• Senior management commitment to supply chain risk, which has risen from 74% to 83% as “high” or “medium” (BCI Supply Chain Resilience Report 2021)
• Diversifying suppliers to spread and reduce risks
• Creating a backup network that can be onboarded as quickly as possible to prevent supply chain disruptions and delay
• Developing a technology-led approach to evolve faster and become more resilient
• Supplier pre-qualification to limit the risks against financial implications
• Consistently review supplier performance to improve supply chain visibility and identify any areas of risk

How to get ahead of future supply chain acts and regulations

Never has it been more important to dig deep into supply chains in real-time with one true view, not just around health and safety risks but wider factors such as modern slavery, diversity, equality, workplace wellbeing and financial stability.

Staying compliant will continue to rise up the agenda in 2023 as governments implement stricter and more stringent supply chain regulations that mean manufacturers need to take full responsibility for their supply chain compliance across their entire ecosystem.

As supply chains become ever more complex and dispersed, it’s vital that each stage of the supply chain is assessed for risks, and control measures are put in place to prevent costly disruptions or weaknesses.

Manufacturers need to look beyond the here and now and think about what might come next. Consistently monitoring risk factors is essential to business performance and resilience. This is why complying with regulations is just the start, with the journey ahead firmly focused on the growing need to avoid unethical practices and manage both ongoing and emerging risks more effectively.

Download Alcumus' latest guide to explore the upcoming supply chain acts and regulations, what they mean for your business and how you can prepare for them. Get your free copy here.