Supply chain integrity can be disrupted by a variety of factors, but an organization can brace itself against business disruption by taking steps to strengthen its supply networks, according to a leading insurance industry executive.
Myriad factors can affect the effectiveness of supply chain activities, from geopolitical instability and disasters to cyber incidents, said Andrea Blair, Nashville, Tenn.-based director of business resilience and continuity management services for Zurich Resilience Solutions, part of Zurich North America, during a Tuesday session at Riskworld, Risk & Insurance Management Society Inc. Annual Meeting in Atlanta.
Cyber-related impacts on supply chains and warehousing and logistics increased by 67% by 2022, Blair said.
Many of these exposures can be mitigated by improving internal systems and tightening controls, Blair said. “Take a hard look at your internal processes. Some gaps are very easy to plug,”; she said, such as contract language.
“Be sure to include quality standards,” in contracts with logistics and supply chain partners, Blair said.
Technology can also help strengthen a supply chain, such as real-time tracking.
“Know where your inventory is,” Blair said, including tracking expiration dates if you’re working with fragile materials.
Securing an organization’s data systems can help prevent some problems in the supply chain, Blair said. Logistics and delivery partners, she said, usually have some access to customer systems to facilitate communication.
There will likely be a cost to implement such changes, Blair said, but they should help pay for themselves.
“This is an expense. Some of these things will cost a little bit of money,” but there is research that shows the improvements will provide a return on investment, she said.