In an increasingly volatile and uncertain world, food and grocery businesses can increase the resilience of their supply chains to better absorb shocks and risks.
IGD’s recent research, Increasing resilience in food and grocery supply chain, outlined the major threats facing supply chains in the grocery industry and what can be done to build resilience into supply chains to better handle interruptions when they occur.
In a survey by IGD, a research and training charity that helps the food and grocery industry deliver the needs of the public, respondents conveyed that the impacts of supply chain interruptions they have experienced in the past two years can be very costly. These interruptions are said to affect service levels, drive interruptions to manufacturing and cause customers to lose confidence in suppliers.
Additionally, they leave an impact on shoppers’ experience and the efficiency of operations.
When asked about the biggest perceived risks which threaten supply chains, as well as risks which actually impacted them in the past two years, survey respondents expressed:
- Perceived risks are related to direct supply chain operations; and
- Risks which impacted supply in the past two years sit outside of direct supply chain operations.
Many of the risks which cause supply chain interruptions are not in the control of a supply chain function as they sit upstream of manufacturing and demand fulfilment, stated the report. Additionally, visibility of these risks poses a major challenge for supply chain leaders.
As such, said IGD, it is important that these upstream risks are made visible, which requires collaboration with other functions, such as procurement, transport, sourcing, technical, product development and finance. Collaboration among supply chain partners can play a major role in building increased resilience, especially through sharing data and services.
Organisations often implement revised ways of working based on interruptions, added the report. These usually require supply chain teams to act and behave differently in difficult situations. Hence, resilience becomes a capability for teams and for individuals. This competency needs to be developed, embedded and nurtured, enabling these revised ways of working to deliver the improvements intended.
How to be more resilient
IGD suggested that the top three techniques to increase resilience are:
- Collaborative identification and management of risks;
- Regular internal risk reviews with all the relevant business functions; and n Scenario planning and horizon scanning (to identify risks beyond the trading and budget windows).
Businesses will have greater awareness of risks and facilitate more proactive management of the risks identified by implementing these techniques, said IGD.
The report affirmed that developing resilience as a capability, for employees and for the supply chain function, is a vital area for businesses to consider. Increasing supply chain resilience also means being better able to meet demand, and reduce the resources invested in managing service challenges and issues.