How to Gain Supply Chain Visibility During the Pandemic

(Photo Credit: Jahongir Ismoilov, Unsplash)

by | Apr 7, 2020

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How to Gain Supply Chain Visibility During the Pandemic

(Photo Credit: Jahongir Ismoilov, Unsplash)

The covid-19 pandemic is complicating supply chain visibility. Travel restrictions, social distancing, and mandatory work-from-home policies have temporarily halted many onsite supplier audits.

“We expect to see four main phases of the crisis: react, resiliency, rebound, and the new normal,” said Pierre-Francois Thaler, co-CEO and co-founder of the corporate social responsibility ratings platform EcoVadis.

Companies are currently in the reactive phase, he said. Leaders are focused on employee safety as well as creating new operating processes to ensure business continuity and avoid supply disruptions.

Environment + Energy Leader asked Thaler how to stay on top of supply chain transparency during these difficult times.

What does the pandemic mean for supplier audits?

Many companies have had to cancel onsite supplier audits to comply with social distancing expectations, travel bans, and government orders.

This threatens sustainable business practices since onsite audits are a key mechanism for many supplier due diligence programs. Along with digital assessments, audits are a key mechanism to help ensure that partners are meeting sustainability and ESG expectations.

What are the risks from canceling onsite audits?

Without an alternative strategy, halting onsite audits negatively affects supply chain visibility and due diligence. It’s difficult to know if supply chain partners are complying with codes of conduct, brand values, and other social and sustainability expectations.

When suppliers come under pressure to deliver beyond normal capacity and are overburdened with the pandemic, compromises could be made. This could include wasting water and energy, unintentionally introducing health and safety issues, forcing staff to work longer hours due to capacity constraints, and more.

Aside from operational, financial, and brand impacts, this puts global sustainability progress at risk.

How can organizations continue to get visibility?

Evidence-based digital assessments and supplier ratings are a valuable alternative to onsite audits. They give companies the visibility they need without having to go on location. Ratings and evaluations are done remotely through desktop assessments.

While ratings can’t completely replace onsite audits — both mechanisms are critical components of a holistic sustainability program — they can foster transparency around sustainability concerns, and offer a clear method for supplier due diligence during the outbreak.

Digital assessment and ratings can also help organizations hone their audit strategy. By understanding which suppliers are performing well and which need improvement, procurement can prioritize the suppliers that need an audit for when they’re able to go on location again.

There will likely be a surge in audits once the outbreak is over; knowing where to focus and prioritize will be critical.

Do you have additional advice for resource managers?

This pandemic is a very fluid and dynamic situation. Constant supply chain monitoring and risk mapping is essential for maintaining visibility and control amidst the uncertainty.

We still don’t know what the total impact of this crisis will be, so it’s important to stay on top of the news affecting your supply chain and sustainability programs — and be proactive in due diligence and mitigation strategies. Also consider helping out smaller suppliers who may be struggling by offering advance payments and other forms of support.

Most importantly, put your people and community first. Make interim policies and procedures clear, reassure your local network how you’re handling the situation, and take steps to protect the wellbeing of your employees, customers, and partners. While it’s a stressful and difficult time, we’re all in this together.

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