Supply Chain Resilience: A Missing Link?

The 2020s marked the start of a decade of disruption which caused supply chain management to go into overdrive: the Covid-19 pandemic; Ever Given’s grounding in the Suez Canal; the Russia-Ukraine war; and the Israeli-Hamas conflict. In direct or indirect ways, inflation too has also reared its ugly head, spiking prices of assorted items up and down the value chain.

Worryingly, the Russia-Ukraine war and, more so, the Israeli-Hamas conflict, have brought geopolitical risks to the forefront of supply chain decision makers. The uncertainty of this conflict on the supply chain poses a myriad of other exposures depending on their locational and temporal impact. How long will this conflict last? Will it spread to neighbouring states, destabilise existing regimes or result in a full-blown US-Iran war? Other risks like travel restrictions, civil unrest and cyber-attacks may also come into play if the Israeli-Hamas conflict escalates.

We have already seen how international shipping has become an unlikely victim of the conflict as nation states bordering the Red Sea take sides. The Houthi rebels, in a show of solidarity with the Palestinians, have launched more than 40 attacks on commercial ships in the Red Sea and Gulf of Aden since November 2023. If the conflict intensifies, the threat of closure of the two arteries of global trade, namely the Red Sea and Suez Canal, will be catastrophic for the global economy.

Identifying potential threats, evaluating their likelihood and impact on the business and stakeholders, are priorities for supply chain leaders in our polycrisis world. But are these business continuity plans rigorous enough? The missing link may be crisis management.

While business continuity plans tend to focus on ensuring the continuation of critical business functions following an unexpected event, crisis management plans are broader, aiming to address the overall response to sudden, adverse and high impact situations. More importantly, communication during a crisis is integral to minimizing reputation/brand damage, financial loss, consumer activism and low employee morale. Timely, transparent, consistent and credible responses are characteristics of a fit-for-purpose crisis communication plan that will preserve the trust between vendors, partners, customers and employees.

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Have you considered the dissemination process to inform and update key stakeholders in a crisis? Often organisations fail to effectively ensure a two-way feedback mechanism that can improve decision making and information gathering as the crisis evolves.

Are you keeping a low profile while you gather all the necessary facts surrounding the crisis? Even as the situation unravels, proactive communication with the available information early and often is a must. This prevents a communication vacuum within the supply chain that facilitates rumour-mongering and assumptions to thrive and thwart damage control.

Do you have messaging templates prepared to address your stakeholders during a crisis? In the pre-crisis stage when risks are assessed and prioritized, message drafts should be created so that they are readily available and easily amended in a crisis. This will enable you to control the narrative by being the first to communicate to your stakeholders instead of the media.

The swift, concerted effort to engage both internal and external stakeholders during uncertainty demonstrates a commitment to provide assurance, creating an environment of collaboration and shared problem-solving. No man is an island in a crisis, especially so in the intricate web of supply chains.

The integration of crisis management and business continuity planning is vital for a comprehensive approach to supply chain and organisational resilience. Both involve risk assessment, planning and preparation as well as testing and training. However in reality, crisis management often takes a backseat to business continuity. This is because the business continuity team may not have the right leadership and communication skills to manage in a crisis.

?The robustness of the response to a crisis lies in the following:

• Detailed stakeholder mapping and management;
• Effective selection and use of communication channels;
• Preparation of messaging scripts/templates;
• Training of spokesperson[s] to front the media;
• Simulation exercises for members of the crisis management team;
• Sustaining the currency of the crisis management toolbox from post-mortems of past crises.

From conflict to chokepoints, the weaponizing of the supply chain is a reality. Responding decisively to any volatile situation, whether in a supply chain or not, requires a rethinking of business continuity management to incorporate crisis communications - identifying the right people and sharpening their skills so that they are poised for action when the inevitable happens. Find out more