How Are Modern Technologies Empowering Businesses with Optimized Supply Chain Risk Management Solutions?

Highlights:

• Introduction
• Glimpse on notable supply chain risks
• Effective supply chain risk management practices
• Profitable acquisitions by leading players in 2024

Supply Chain Risk Management (SCRM) is a collaborative approach that organizations employ to identify, assess, and mitigate risks associated with their supply chains. This process is important for ensuring business continuity and maintaining competitive advantage in an increasingly intricate and interconnected global economy. SCRM encompasses a variety of risks, including natural disasters, geopolitical upheavals, cyber-attacks, and supplier failures, all of which disrupt operations and impact profitability.

Potential supply chain risks affecting the global economy

The rapidly evolving interconnected world has brought numerous benefits to supply chains, but it has also introduced significant risks. Therefore, proactive supply chain risk management is highly essential for organizations. Cyber-attacks and software vulnerabilities are emerging threats that can halt entire supply chains. For instance, the Colonial Pipeline ransomware attack in 2023, disrupted the fuel supply to the entire U.S. East Coast for six days, causing widespread shortages and severe economic impact. Other notable examples are the U.S.-China trade conflict and Russia's invasion of Ukraine which have caused due to geopolitical instability, leading to complicated supply chains through trade barriers and delays.

On the other hand, climatic-related events are also threatening supply chains. In 2023, Hurricane Idalia resulted in approximately $20 billion in economic losses across the southeastern U.S., disrupting regional logistics and agriculture. Similarly, Hawaii wildfires resulted in around $6 billion in damages, severely impacting local businesses and tourism-related supply chains. These events showcase the growing vulnerability of global supply networks owing to uncertain climatic events, necessitating robust risk management and resilience strategies.

Best practices to manage emerging supply chain risks

In the last few years, many businesses across various disciplines have been impacted by supply chain interruptions. The emerging risk management solutions play a key role in enhancing and improving the resiliency and efficiency of supply chain networks. Basically, there are two types of risks including known risks and unidentified risks. The first type of risk includes a company’s financial strength, the products it makes, or the markets they serve. To handle these risks, organizations must employ effective tools offering controlled and scheduled issues management through scenario training. Moreover, some enterprises have also started managing known supply chain risks through a crisis handbook and a strong digital platform with a comprehensive view of their risk portfolio.

Unidentified risks are difficult to assess even over hundreds of scenario-testing events. The best way to manage unidentified risks is through enhancing a risk-aware culture throughout the organization, empowering its people to perceive and react rapidly to an external issue.

These days, the integration of modern technologies such as AI, advanced data analytics, and machine learning, has enabled organizations to better anticipate disruptions and take proactive measures. For example, open-source intelligence provides information and visibility on the suppliers, vendors, and transportation companies involved throughout the supply chain. Additionally, the rise of IoT offers real-time visibility into the operations along the supply chain, boosting transparency and enabling quicker response times.

Such rapid advancements in technology are expected to boost the growth of the supply chain risk management industry. The market is anticipated to rise at a CAGR of 9.2% from 2022 to 2031.

Exiger expanded its capabilities with Versed AI to enhance multi-tier suppliers

In July 2024, Exiger, a leading provider of technology-enabled risk and compliance services announced its acquisition of Versed AI, an AI platform that accelerates the process of extracting and aggregating multi-tire supplier networks. This acquisition has allowed Exiger customers to rapidly expand multi-tier visibility with access to unrivaled advancements in supply chain tracing, orchestration, and mapping. In a conference, Brandon Daniels, the CEO of Exiger, stated that through this agreement, the company aims to offer a simple solution to procurement and supply chain professionals across public and private sectors to meet daily operational and regulatory requirements such as tariff analysis, alternative vendor sourcing, forced labor checks, environmental impact assessments. By integrating with Versed AI, Exiger is capable of delivering fast, accurate, and advanced solutions for supplier mapping and risk analysis. These technologies run on proprietary data created from open-source content and bills of materials.

Summing up

Supply chain risk management has become an essential practice for modern-age organizations looking to handle the growing complicacy of global supply chains effectively. Moreover, the rise in adoption of cloud-based supply chain management software in this field is expected to open new possibilities across the industry in the coming years.

To get more insights into the lucrative opportunities in the landscape of supply chain risk management, talk to our industry specialists today!

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