New regs adding to supply chain woes
A surge of new regulations across the world in response to the supply chain crisis has placed greater accountability on suppliers and purchasers, warns UK national standards body BSI.
It said that organisations will have to monitor changes to regulations if they want to best cope with ongoing global disruptions.
New legislation, from the CHIPS Act in the US to increased GDPR regulations in Europe, has seen governments intervene to boost domestic supply chains and enhance governance.
“Unprecedented price inflation, exacerbated by the Russia-Ukraine war, but also an enduring legacy of Covid-19-related shutdowns and the resulting prolonged shortage of key manufacturing components, has awakened governments to the importance of global supply chains to national interests,” BSI said.
Publishing its annual Supply Chain Risk Insights Report, BSI says organisations that manage disruption to their supply chains in 2023 will be best equipped to weather further financial challenges.
Susan Taylor Martin, chief executive of BSI, said: “2022 saw volatility in global supply chains that many would never have expected in their lifetime… Given the turbulence of the last 12 months, 2023 will be an important watershed for many organisations – with those that successfully manage their supply chain risks being more likely to thrive.”
BSI’s analysis of supply chain trends last year reveals that theft from facilities replaced stolen cargo from hijacking as the leading cause of loss. Theft from facilities now accounts for more than a quarter of all thefts. Hijacking was down from 24% to 17% but BSI said it continues to impact global supply chains, in particular food, pharmaceuticals and construction materials.
Food and beverages remain the most commonly stolen commodity overall, followed by fuel and electronics, according to the BSI.
In addition to prioritising regulatory changes, BSI said organisations need strong leadership and buy-in from the top to manage supply chain risks.
It also found that 73% of firms are significantly concerned about the risks posed by supply chain digitisation. BSI said there is urgent need to address digital risks.
It went on to urge organisations to invest in tools and technology, such as data analysis and IoT, to understand their supply chain and grasp the unique challenges facing each sector.