Even companies with a high level of integration often depend on a network of thousands of suppliers and sub-suppliers. The range of transactions and interactions makes it difficult to monitor supply processes and manage the risks involved. As the global COVID-19 crisis clearly demonstrates, the limited visibility of supply chain risks and their potential impacts can lead to reduced revenue, inflated costs, disruption or cessation of production, damaged credibility to customers, investors and other stakeholders, ultimately threatening even the survival of businesses.
Responding rapidly to the urgent need for businesses to effectively manage global supply chain disruptions and to operate smoothly in the midst of the unprecedented COVID-19 pandemic, PRIORITY designed and developed a holistic solution to address of the post-COVID era and for rebuilding business resilience against future asymmetric threats.
The service includes the recording of the supply chain and the assessment of its resilience to interruption / inconsistency events, the assessment of the risks for the proper operation of the supply chain and the preparation of a Supply Chain Resilience Strategy. All of the above processes are automated and digitized through a software tool that supports decision making based on reliable data.
1. Capture and evaluate the resilience of the supply chain to disruption / inconsistency events
The unprecedented global economic crisis highlights the importance of resilient suppliers and calls into question the de-facto credibility. As a first step PRIORITY helps businesses to:
• gain visibility for the extent and depth of their supply chain through analytical mapping (supply network mapping)
• objectively assess the criticality of suppliers based on their impact on the achievement of production objectives
• holistically evaluate critical supplier (supply chain audit & assurance) for the most critical parameters of reliability and resilience, such as financial well-being, quality, business continuity, information / facility security and legal / regulatory compliance
• make strategic decisions as timely and correctly as possible based on valid data.
2. Risk assessment at the critical points of the supply chain (supply chain & vendor risk assessment)
Understanding the risks associated with each critical supplier allows for precautionary measures to be taken in a timely manner to reduce exposure to these risks and their effects. PRIORITY applies a systematic methodology that helps companies to:
• identify weaknesses and threats at critical points in their supply chain
• assess the risk profile of their critical suppliers in an efficient, consistent and objective manner
• rate critical suppliers for their resilience and crisis response maturity
• identify and prioritize the measures that need to be taken to address unacceptable risks.
3. Supply Chain Resilience Strategy
Despite the numerous disruptions to global supply chains over the past decade due to disasters (e.g. volcanic eruption in Iceland, earthquake and tsunami in Japan, floods in Thailand), the majority of companies found themselves completely unprepared for COVID-19 crisis management. PRIORITY helps companies develop and implement a Supply Chain Sustainability Strategy, which includes:
• preparation of specialized BCP plans for increased preparedness in emergencies and unpredictable supply chain disruptions, enabling them to react calmly and recover quickly and efficiently
• select appropriate measures to reduce disruption risks, such as reviewing contracts with existing suppliers, finding alternative suppliers, using or abandoning “just-in-time” methods, supply chain diversification) and the vertical integration of critical activities (vertical integration)
• Adoption of a framework of initial selection and periodic evaluation of their suppliers based on measurable indicators of reliability and resilience (KPIs / KRIs) and internationally recognized standards
• designing a mechanism for systematic monitoring of the performance and risk profile of their critical suppliers, in order to timely and effectively manage downtime or changes in the level of services provided.
PRIORITY supports businesses in automating and digitizing processes related to supply chain management using a software tool. The integration of digital intelligence in supply operations provides continuous information to the Management to make strategic decisions based on reliable, valid and complete data, increased control over the outsourcing trend that is constantly enhanced and maturity in managing the increasingly complex interconnected business environment.
The COVID-19 pandemic is not just a short-term crisis. It forms a new regularity and has unpredictable consequences on consumer behavior, demand models, service channels, business liquidity, the availability of required resources, the way chains work and the operation of supply chains. Ensuring long-term resilience in corporate value chains is more urgent than ever for their survival and effective management of future challenges.