A gathering tsunami of risks: extreme weather, cargo crime, environmental damage and political turmoil, threatens to disrupt the global supply chain.
There are calls for logistics professionals to take a new approach to manage this volatility, according to risk management expert Omera Khan, Executive Strategy Advisor for Risk Intelligence and Professor of Supply Chain Management at Royal Holloway, University of London.
“Raging trade wars are causing price hikes, which are disrupting global supply chains. There are also changes in demographics due to the rise of urbanisation and the depletion of our green and rural areas that could have a ripple effect for certain supply chains that rely on natural resources,” said Khan.
Consumer awareness of the ecological impact of the products they consume is also forcing logistics companies to rethink their supply chains.
According to Khan, there is a need for a new way of thinking to mitigate risk and to look at broader collaborative solutions. Logistics managers in the future will need to respond flexibly and be adaptable to shifts in the supply chain.
“We need a mindset shift as supply chain management is no longer about getting product from A to B. Supply chain is about collaboration, flexibility and adaptability. There is a need to get back to the drawing board and recognise that the new normal is doing business in an environment that is volatile and turbulent.
“We require skilled people that can be creative, think ‘out-of-the-box’, work across functions and have mixed skills and competencies,” said Khan.
“Inertia, complacency to embrace change and risk are the biggest failures for many organisations,” she added.
Training will play a key role in managing supply chain risks, according to Khan, with modular courses specifically focused on minimising and managing risk and apprenticeships to train the supply chain managers of the future.
Cargo crime figures continue to grow at an alarming rate, and Khan says that transport-related theft is increasing in sophistication.
“Partnering with risk intelligence providers should be considered as part of an organisation’s strategic risk management approach. These strategic risk partners can help provide on-time alerts and re-routing and advice on safe parking spots amongst a myriad of many more optimal solutions.”