Optimising financial processes

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Risk in 2022 – Supply Chain Woes Continue

It is nearly 2022.

Our organizations have, by now, developed risk management mechanisms, processes, protocols and better visibility than ever.

But COVID-19 was/is one of those “Black Swan” risk events that took us all by surprise.

Business-wise, we reacted with a speed and agility that would make a start-up proud. We raised our speed of response and reaction, we moved to remote and separated work almost overnight, we rapidly deployed contact-less interfaces and interactions, raised the pace on integrating end-to-end business processes, accelerated digitization and created a razor-sharp focus on data to inform faster, better business decisions.

But COVID-19 has also spawned a bunch of other challenges in its wake, and some of the current chaos should not be a surprise.

For example, supply-chain disruption started more than a year ago as governments’ and corporations’ responses to the pandemic created a million small interruptions.

That combined with exploding consumer demand is a recipe for a transportation bottleneck in the form of port backlogs that created the famous line of cargo ships off the California coast as well as elsewhere in the world.

This is a genuinely global challenge.

As we try to shove more goods through this bottleneck, it gets worse.

The backlog and the mess of factory closures, labor issues, and equipment shortages behind it has been deemed the “everything shortage” or the “supply-chain crisis.”

Executives disagree on when the supply-chain crisis will end, but none say it will be very soon. Estimates range from early next year to 2023.

Our job now, as the crisis rolls on, is to look at how it happened, what happens next, and when it will all be over.

Business Insider published a useful summary of all this. Whether you have direct personal responsibility for, or impact from, supply chain or not, this is an important case study in risk management.

What can we learn? You can read the brief article here . . .

Thanks for reading.