Daily Archives: December 19, 2024

Resilience is About to Take on a Whole New Meaning!

In Procurement and Supply Chain, resilience (which is defined as the capacity to withstand or recover quickly from toughness) typically refers to supply resilience and the ability to adapt when a supply line gets cut off (due to a supplier bankruptcy or plant shutdown; port strike; logistics delay or loss; etc.). That’s because it used to be the biggest threats to a business’ operation was a supply disruption. Now, it’s only one threat among many that can devastate a modern business. Today’s enterprises have to deal with, among other emerging threats:

  • Natural Disasters: which can now occur close to home even if they never did before (and thanks to global warming they will soon be 10X what they were five decades ago!)
  • Rapid Cost Increases: as a result of tariffs, sanctions, embargoes, and trade wars (as per our article last week on why cost reduction ain’t happenin’, for example)
  • Cyber Attacks: which can hold part or all of their business ransom, unless they have a complete back up less than 24 hours old and are willing to take take their entire business offline, restore and build manually, and keep the business offline until the holes that were exploited by the hackers are identified and plugged
  • Business Operating System Failure: today’s enterprises run on SaaS solutions, and in today’s economic environment, some of these vendors could fail with very little notice and all of a sudden you’re unable to efficiently execute parts of your business until you find a replacement system (and if you didn’t ensure your contract contained the right to download all of your data and configuration settings at any time, and test that you could the minute the system was fully installed and populated with your data, and you can’t do so before the system goes offline, you could be in serious jeopardy — complete data access is way more important than code escrow, especially if you have no clue how to maintain and operate the system, so make sure it is in every contract you sign (and if it’s not, don’t sign)!)
  • Lack of Talent: many reasons for this:
    • Layoffs/Early Retirement: When times got tough, you happily let the boomers walk out the door, enticed Gen-X to do early retirement, and laid off the senior Gen Y talent — most of the top talent is now gone and the rest, that should have been retained, never got proper training or experience
    • Gen-AI: you fell for the bullcr@p that it would allow you to reduce your workforce and solve all your problems and not only did you not bring needed talent in, but you let more walk out the door
    • Tough Competition: smart companies are realizing that while the right tech in the right hands applied to the right problem can make employees super human, without the right talent with the right Human Intelligence (HI!), the AI tools are useless and are seeking out the talent that remains who can use tech with more audacity and resolve than ever before; and if your top talent isn’t well paid and happy, you could lose them without warning (FYI: you will if you mandate unnecessary office returns — remember, it’s about productivity, not being at a certain place at a certain time)

In other words, possible business ending events are going to arise and engulf all areas of the business and a business that can’t quickly identify, assess, mitigate, and monitor will not be a business that survives.

Resilience is going to take on a whole new meaning, so make sure your Procurement and Supply Chain departments are up to the task! You might have thought the worst was behind you now that the COVID-19 Pandemic is over, but that was just the trial run!