The coronavirus pandemic has had a huge impact on global risk-management strategies. Many companies learned in 2020 that their supply chains weren’t prepared for a disruption of such massive scale. Now, they’re determined not to get caught short again.
Not all businesses were affected by the virus equally. “Those that were best prepared were those that fared the best,” says Bill DeMartino, managing director for the Americas with riskmethods. “Preparation,” in this case, means more than simply identifying all of the critical nods in one’s supply chain. It’s about understanding how they’re connected, and actively monitoring them.
When it comes to assessing the potential risk of a supply-chain disruption, what kinds of scenarios should companies be envisioning? In the case of COVID-19, it would appear that their imaginations fell well short of what actually occurred. Previous disasters — an earthquake and tsunami in Japan, floods in Thailand, an erupting volcano in Iceland — were limited to specific regions of the world. Coping with them meant quickly finding alternative sources of production outside the affected area.
COVID-19, however, struck the entire world, albeit in stages. How, then, does a supply chain cope when there’s no clear choice of a “safe” region for sourcing raw materials, components and finished goods?
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