LogiSYM Digital 2020: COVID-19 Is A Wake-Up Call for Supply Chains to Ramp Up Business Continuity & Security – LogiSYM August 2020
With COVID-19 disruptions, many companies are grappling with security issues and facing challenges to stay in the game.
In the recent LogiSYM Digital 2020 on 25th June, Supply Chain Security in the post COVID-19 world panel, moderator and Director at ESP Consult, Joe Lombardo, discussed the topic with invited supply chain experts –Tony Lugg, Chairman at TAPA APAC; Karmjit Singh, Chairman at CILT Singapore; Prof Dr Marco Tieman, Founder at LBB International; and Vivien Cheong, Regional Sales Manager at TICONTRACT of the Transporeon Group.
When asked about the impact of COVID-19 on supply chains, Tony Lugg pointed out the lack of Business Continuity Planning (BCP) in many organisations. Earlier in mid-January, TAPA conducted a survey across Asia Pacific to assess the impact of COVID-19 and identify companies’ situation and needs.
Results revealed a shocking gap of 63% of the participating companies do not have a BCP in place for their operations in China and Asia Pacific. As a result, they were knocked by a sudden storm when COVID-19 hit, and only to realise the importance for BCP thereafter.
Agreeing to Tony’s point, Karmjit Singh added, “BCP is a major weakness for most companies. If you do not plan for it, your business with disappear.” Karmjit advised companies to prioritise the protection of staff’s health and safety to ensure businesses are kept away from COVID-19.
Karmjit also highlighted the importance of cash flow for organisations to stay afloat and avoid entering debt when revenue is affected. “BCP is not the only pressing issue,” Tony went on to highlight. Other rising concerns to be addressed, “suppliers were single-sourced, and there is a general lack of risk assessment that results in companies not being able to switch to alternative routing.”
Working remotely has also brought about the rise of cyber-attacks that has impeded several firms. Assessing cyber risks and implementing response strategies are the fundamentals of BCP.
With demand for Personal Protective Equipment (PPE) and Fast-Moving Consumer Goods (FMCG), supply chains are also facing rising issues of counterfeit goods, trade compliance, and even smuggling of illicit products. Criminals are quick to capitalize on loopholes as supply chains are disorganized and rewired during the crisis.
To Joe Lombardo’s question on how to change the mindset of top-level management, Tony advised that organisations should include BCP into their risk register. “BCP is a low-level item that is not getting the board attention. Once BCP is in the risk register, the company basically has to now assess the risks of disruptions at all levels”, Tony explained.
“If pandemic extends another six to eight months, there will be an economic ‘depression’ where social unrest and opportunistic crimes will take place. With the boom of eCommerce and the shift towards last mile delivery, information security gaps will mean gaps in supply chain. It is important for the industry to address these security concerns now”, Dr Macro emphasized during the discussion.
Vivien Cheong shared the recent shift in freight buyers’ behaviour, “We are seeing freight purchase being commoditized. Clients are more capacity and service driven during the pandemic. This mentality is expected to last for at least 12 to 24 months”. COVID-19 has prompted many firms to be less price-driven and to focus on pre-emptive business continuity.
Experts believe that the BCP gap in supply chains has been understated. COVID-19 is a wake-up call for companies to ramp up business continuity, reassess supply chain risks, and invest on security tools that have been overlooked in the past. Supply chains ought to stay resilient with regular risk assessments and improved strategies to help future-proof their operations.