S U P P LY C H A I N
Procurement and Supply Chain
Mitigating disruption risks
By Ian Brennan and Harry Lake, BDO
As the COVID-19 pandemic ripples throughout the
world economy, transforming lives in ways many
never thought possible, businesses across the globe
continue to face unprecedented supply chain disruptions.
With supply chain shortages, new border restrictions,
large-scale layoffs and virtual lockdowns in cities with signifi-cant
coronavirus outbreaks, how can organizations weather
the impact and future-proof their business?
In this article, we identify some of the short and long-term
strategies that Canadian businesses can implement to man-age
procurement and supply chain risk during COVID-19.
Procurement and supply chain disruptions
From aviation to electronics, pharma and food, no industry is
immune to COVID-19.
According to an Institute for Supply Management sur-vey,
almost 75 per cent of companies south of the Canadian
border experienced disruptions in their supply chains as
a result of coronavirus-related transportation restrictions.
Surprisingly, 44 per cent of the companies did not have a
plan to deal with this kind of disruption. The proportions in
Canada are very similar. Supply Chain Canada’s open survey
recently reported that 70 per cent of respondents had seen
disruptions to their supply chain by COVID-19.
While the overall economic impact of the pandemic is
unclear, what is certain is that there will be several more
months of operational impact from COVID-19 throughout
the domestic and global supply chains.
To help companies prepare for the unknown and be better
prepared for future challenges, we have identified three key
risk areas for many organizations.
• Labour capacity: This can be impacted by a workforce
that is diminished or stretched to meet increasing
demand and temporary reassignments to crisis task
forces that eclipse day-to-day operations. To maintain
business continuity, companies will need to identify
their mission-critical functions and establish their
minimum service thresholds.
• Supply chain exposure: This can be impacted by
reliance on suppliers located in affected regions, and
cost, scheduling and shipping delays due to lockdowns
and border closures. These problems can be magnified
due to the cascading impact on your suppliers’ supply
chains. To mitigate this risk, companies will need to
diversify their supply chain to ensure a steady cadence
and continuous flow of products and services.
• Fraud and compliance: This can be impacted by
increased risk of procurement fraud and non-compliance
with internal procedures, relevant
regulations and legislation during the crisis.
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