collaborate with suppliers to create a resilient supply chain

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Collaborate with Suppliers to create a

Resilient Supply Chain

ANKIT KOHLI

Founder, Pure Research Private Limited

http://www.pureresearch.co/

1 © Pure Research Private Limited | Insights & Viewpoint| www.pureresearch.co

Insights & Viewpoint

Collaborate with Suppliers to create a Resilient Supply Chain

Recent floods in Cumbria are another grim reminder of the United Kingdom’s vulnerability to extreme

weather natural disasters. In the past decade, there have been several instances of floods, tornadoes,

hurricanes, and tidal surges, which have caused a lot of devastation to life and economy in the country.

The U.K. government has taken preventive steps of late to minimise damage, but the Cumbria

situation has shown that much more needs to be done.

Cumbria – In the eye of a storm

For Cumbria, the recent floods caused by Storm Desmond is the third major flooding incidence in the

past decade. The estimated cost of these floods, according to PwC, will be around GBP 500 million,

including insurance and economic costs. This compares with GBP 275 million for the 2009 floods and

GBP 272 million for the 2005 floods.

Source: PricewaterhouseCoopers

Around 4,000 of the 25,000 businesses in Cumbria have been impacted by these floods, and for some

businesses, the situation has deteriorated to a point where the owners are considering moving out of

the region. In such a situation, the negative impact will not be limited to these local businesses only,

but will also be felt across the supply chains of large firms that source from Cumbria-based suppliers.

Businesses have to look at sustainable solutions

We believe that moving out of the region (for suppliers) or changing suppliers (for buying

organizations) is not a sustainable solution to this problem. Instead, businesses and supply chain




managers must a) recognize and understand the challenge posed by natural disasters; and b) work

collaboratively to minimise the damage and disruptions.

One part of the challenge is that such disasters still come as a surprise to most businesses. However,

an equally important part of the problem is that many businesses, especially smaller ones, still lack a

plan to prevent, manage, and recover from such disasters. The combination of the two factors results

in business disruption and loss (material as well as financial).

Collaboration leads to a resilient supply chain

Buying organizations that have their critical suppliers in such vulnerable regions (such as the coastal

regions in the northern U.K.) need to move from a pure commercial relationship to a collaborative

relationship. The relationship should be aimed at engaging and improving the supplier’s ability to deal

with such situations and build a resilient supply chain. We call this a collaborative relationship because

all buyers and suppliers might not have the expertise or resources to tackle natural disasters on their

own.

It can start with creating a framework to analyse the risk exposure of a supplier based on its

location, mobility (ability to relocate if required), and resources.

The next step can be to assess if the supplier has the appropriate emergency preparedness

plans, business continuity plans, and disaster recovery plans in place. Also, check if the

supplier has mapped its extended supply chain and is aware of the risks that can emanate

from n-tier suppliers.

Once the supplier’s exposure to and preparedness for a disaster is established, the next step

is to fill the gaps in the supplier’s emergency preparedness against such disasters. This can be

achieved by learning from the best practices which have been adopted by organizations

worldwide, and customizing them to the local needs of each supplier.

So while predicting and reducing natural disasters may be beyond the scope of buying and selling

organizations, adopting a collaborative approach can help make supply chains resilient to natural

disasters, including those related to extreme weather disasters.




Ankit Kohli is the Founder of Pure Research Private Limited, a procurement intelligence firm. Ankit and

his team work with procurement teams worldwide to create secure and sustainable supply chains,

based on actionable research on suppliers and categories.

Disclaimer: Although the information contained in this publication has been obtained from sources

believed to be reliable, Pure Research disclaims all warranties as to the accuracy, completeness or

adequacy of such information. Pure Research will have no liability for errors, omissions or inadequacies

in the information contained herein or for interpretations thereof.

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About Pure Research

Pure Research provides customised research and business intelligence to leading corporates, public

sector organisations, financial services firms, and professional services firms. The company specialises

in providing high quality procurement and supply chain intelligence to CPOs and procurement

professionals worldwide. Analysts from Pure Research work as an extension of its client’s procurement

teams to deliver high quality insights on suppliers and supply markets. The company has offices in

London, U.K. and Delhi, India.

If you are looking for more information about Pure Research’s services and experience of working with

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