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Risk in Context

Supply Chain Disintermediation in a Disruptive World

Posted by David Tate 30 April 2018

The UK retail and food manufacturing marketplace has become one of the most fluid and competitive environments in years. Continuing shifts in customer preferences and unprecedented technological sophistication are forcing companies to innovate to stay relevant. Disruptors are reshaping consumer and market behaviour.

Costly last-mile delivery continues to challenge retailers responding to consumer demands for speed. Also, new entrants moving into fresh food and beverage retailing, and pure-play online retailers looking to harness bricks and mortar, will alter current conventions related to the supply and demand of goods.  These developments create a myriad of challenges for retailers and suppliers. Peaches bruise and meat rots, making it difficult to supply perishable items like groceries. Consumers demand that inventory needs to be closer, reducing last mile times, and suppliers must respond to retailers’ demands for new products, speed of delivery, and flexible consignment sizes. 

Supply networks have therefore grown correspondingly more complex – and vulnerable. While rapid advancements in automation, single sourcing and cloud computing have provided competitive efficiencies for organisations, these advantages bring with them a growing array of risks.

Managing Disruptive Change

In this volatile business environment, a deep understanding of both supply networks and the organisational resilience to respond quickly to threats is critical to business success. Understanding the strengths and vulnerabilities of key suppliers and buyers can give your organisation a competitive advantage.

Ask yourself and your team the following questions:

  • What are the most critical points in your supply chain?
  • What is the financial impact to a loss of a key supplier and how long could the disruption be?
  • What contingency measures are available to ensure supplier continuity?
  • Who supplies your suppliers and what do their risk profiles look like?
  • How visible are the suppliers’ risk management and continuity processes?

Taking a data-driven approach where both risk and its mitigation are measured can help organisations ensure that the right risk insights and treatments are in place to protect the new ways their businesses operate.

Related to:  Retail & Consumer Brands

David Tate

Retail, Food & Beverage Practice Leader, UK & Ireland