SCRS Conference Day 1 Session #2
Risk Assessment & Business Continuity: Two Critical Aspects of Resilient Supply Chain
By Dr. Christian Fjäder, Geostrategic Intelligence Group
In today’s rapidly changing business landscape, supply chain disruptions have become a looming threat for companies across industries. As businesses strive to stay competitive and maintain seamless operations, the need for a robust system to mitigate such challenges has never been more critical. Addressing this issue requires a deep understanding of two crucial aspects – risk assessment and business continuity. By effectively assessing potential risks and establishing strategies for business continuity, organizations can pave the way for a resilient supply chain that can weather any storm.
An Era of Uncertainty and Disruptions – More Frequent, More Impact & More Surprising
Dr. Christian Fjäder emphasized that we are in an age of uncertainty and the interaction between human, technology, and environmental factors are becoming more complex with the increased interdependence between those systems for everything to work. “News such as Covid-19, the Suez Canal obstruction in 2020, War of Ukraine and past events like the 2011 Tsunami in Japan and the floodings in Thailand, all serve as reminders that we never truly know when these impactful events can occur, and their consequences can be immense,” stated Dr. Fjader. Businesses need to be prepared for new types of events and even new types of impact. At times, it can even be a familiar event but the impact may be extremely surprising.
Increasing resilience is a strategic imperative with an increasing sense of urgency today. Risk management and business continuity management in the context of supply chain needs to change today.
The constant advancements in technology, shifts in global politics, and the unpredictability of natural disasters all contribute to a sense of instability. The traditional ways of doing things are being challenged, and we are forced to adapt and find innovative solutions to unprecedented problems. Our past experience is helping us less and less for the future.
The future holds many unknowns, but by recognizing and embracing this era of uncertainty, we can better prepare ourselves to navigate and thrive in this ever-changing landscape, especially for the following four disruptive trends.
- Climate Change and Extreme Weather Events Challenges Supply Chain Resilience
One of the most pressing issues we face today is the increasing frequency of natural disasters and extreme weather events. These events will have system level changes too, affecting demographics, migration trends and infrastructure, which in turn affects the operating environment of supply chains. Supply chain resilience is crucial in mitigating the impact of these disruptions and ensuring the smooth flow of goods and services in the face of such challenges.
2. Geopolitical Conflict and Geoeconomic Competition are Fracturing Globalization
For the first time since the Second World War, major armed conflict is taking place at this very moment. Besides armed conflict, the international system is increasingly challenged by geoeconomic competition – the increasing use of economic resources to reach strategic political goals. Economies being weaponized in many ways and proliferated in different types of sanctions, export controls, trade restrictions, tariffs and investments. This is already evident in the decoupling conflict between the US and China, and also in strategic autonomy and self-sufficiency in Europe. The uncertainty surrounding these conflicts makes it difficult for businesses to plan and adapt, further exacerbating the disruptions faced by supply chains around the world.
3. Disrupted Global Trade
The outbreak of the Covid-19 pandemic has brought global trade to a screeching halt and severely impacted the movement of goods and services. Governments are taking measures to protect natural economies and ensuring those critical supply chains that support those natural economies work on all conditions. Earlier in June, the EU released a new strategy for European economic security, highlighting three major risks – resilience of supply chains, physical and cyber security of critical infrastructures, and technological security. Japan also released an economic security promotion last year with a target of supply of essential supply chains.
4. Digitalization of Supply Chains increases Vulnerability to Cyber Threats and Digital Disruptions
While digitalization of the supply chain offers numerous benefits in terms of efficiency and transparency, it also brings with it new vulnerabilities. Exciting opportunities, like AI and Quantum Technology, have risks that we are unaware of yet. The consequences of such cyber disruptions can be significant, leading to financial losses, reputational damage, and even compromising the safety and well-being of individuals.
Supply Chain Resilience is an Essential Strategic Requirement
According to Dr. Christian, “Businesses across diverse industries are increasingly recognizing the significance of supply chain resilience in their strategic plans. Risk management should be approached as a holistic and collaborative exercise, making it a critical element of the supply chain that requires continuous improvement.“
As global supply chains become more intricate and unpredictable, organizations are realizing the significance of developing resilience to effectively handle disruptions and maintain operational stability. Supply chain risk management is a continuous and constantly improving process, otherwise we will be behind the revolution of risk. Effective risk management and business continuity management constitute the building blocks for developing resilience.
TAPA Standards for Resilience
In conclusion, Dr. Christian emphasizes the significance of implementing standards based on resilience in today’s fast-changing and vulnerable supply chain. “TAPA is now putting in a lot of effort into improving these critical areas and there will soon be Business Continuity Standard with training and all elements of a Standard to help businesses. Make use of these training and efforts to the maximum. The more we can make use of these Standards, the better we all can be. As supply chains are very connected and dependent, the weakest link can break us all”, said Dr. Christian.
TAPA standards provide the necessary guidelines and requirements to ensure resilience and security of the supply chain. By adhering to TAPA’s global Standards, businesses and their supply chain partners can maintain a secure and resilient supply chain, ultimately ensuring the smooth and efficient flow of goods and services.
To learn more about TAPA Standards, please visit www.tapa-apac.org
About the Speaker
Dr. Christian Fjäder
Managing Director, Geostrategic Intelligence Group
Dr. Christian Fjäder is the Managing Director of Geostrategic Intelligence Group (Geostrat) Ltd, a boutique geostrategic risk and resilience research and advisory firm. Prior to Geostrategic Intelligence Group, Christian held leadership positions in public and private sectors and has extensive corporate experience in security, risk, and resilience leadership in regional and global leadership roles. Christian has frequently presented in international high-level meetings and conferences, e.g., at the European Union, NATO, and the OECD High-Level Risk Forum (HLRF). Christian has published scholarly articles in international security, geoeconomics, resilience, and strategic risk. Christian is currently an Expert Associate at the National Security College (NSC), The Australian National University (ANU).
Watch other SCRS Conference 2023 Keynotes and panel discussions here: Session Replays