Part 4: Mitigate risk by embracing innovation
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I’m optimistic about the future, provided organizations work together and leverage technology to drive the future resilience of supply chain. - Mark Brown, Global Managing Director, Digital Trust Consulting, BSI
May 11, 2023 - BSI’s recent Supply Chain Risk Insights Report reflects on the global impacts surrounding supply-chain cyber vulnerability and ransomware risks, price inflation, labor issues, and recent legislation requirements. In part three of the series, Jim Yarbrough, Global Director, Supply Chain Solutions, BSI walks through processes to implement within your organization’s supply chain to help ease the pressures of global uncertainty and keep business thriving. Now, we examine how embracing innovation results in enhanced overall supply-chain operations.
Overcoming global uncertainty
Embracing innovation and the digitization of supply-chain operations can be transformative in helping organizations move through global impacts such as climate change and manage any repercussions emanating from geopolitical unrest.
Innovation helps reduce business costs and give a competitive advantage; however, countless leaders have concerns about the challenges and risks that coincide with it. A recent BSI survey identified that 73 percent of respondents state that the Chief Risk Officer (CRO) or Chief Operations Officer (COO) is significantly worried about the risks posed by the digitization of the supply chain. More notably, not one organization surveyed felt 100 percent confident that they had addressed the risks.
Leadership teams also generally view supply-chain operations as beyond their control. However, by implementing measures that continually address operational resilience, control can be taken back (read Mark’s recent blog: How to protect your supply chain from disruptive cyberattacks Part 3: How digital transformation is affecting cybersecurity to learn more).
Innovation is not constrained to technology. It involves technological, cultural, and strategic choices to boost organizations’ ability to generate new ideas and handle uncertainty. There are several innovation initiatives that organizations can implement to help identify and mitigate risks, leading to enhanced operations. These include:
- Creating a culture of innovation inspires a safe environment for employees to communicate freely and without judgment. By fostering this culture, leadership can encourage employees to identify potential risks and suggest new ways of mitigating them.
- An analysis by Forrest Brown in 2022 shows that many organizations are creating senior innovation roles to lead on such initiatives. The non-profit revealed that 48 percent of FTSE100 UK firms now have a Chief Innovation Officer (CIO) or head of innovation role. Leaders have the power to implement strategies that drive disruptive innovation programs throughout an organization and ensure the organization is adapting to market challenges (read Bridging the gap: Cybersecurity to c-Suite to discover more).
- Implementing new technologies including artificial intelligence (AI) and Internet of Things (IoT) is essential for business survival. Technology offers promising answers to complex questions across organization and supply-chain operations. For instance, during a heat wave, IoT devices can monitor the internal temperature of precious cargo such as vaccines, which are sensitive to extreme temperature changes. Using IoT to monitor and flag temperature changes streamlines the transportation process and reduces risk by ensuring that vaccines will be viable once delivered to their destination (read How artificial intelligence bolsters global supply chains by Craig Civil, Director of Data Science and AI, BSI to learn more).
- Encouraging stakeholder collaboration within an organization and externally with suppliers in the supply chain helps to continuously generate ideas and ways of tackling challenges. For example, an organization can partner with a startup that is developing a new incident-management or reporting technology that could help identify risks more efficiently.
Adopting innovation across the digital supply chain while employing strategies to mitigate risks is no straightforward undertaking. Innovation itself presents both risk and opportunity for organizations. It requires time and effort, but the investment is what strengthens organizational resilience and prevents unwanted complications or risk exposure later down the line. Organizations must weigh the impacts of neglecting risks versus falling behind in innovation and being outmaneuvered in business agility and operations.
In the final installment of our Supply Chain Risk Insights series, Tony Pelli, Practice Director, Security and Resilience, BSI explores three supply-chain priorities for organizations to consider in the year ahead to establish resilience in the face of uncertainty.
Download BSI’s supply chain risks insights report here and listen to Intelligence Insights & Enhancements: A Preview of the 2023 BSI Supply Chain Insights Report with Jim Yarbrough for a full report summary. Read Protecting your digital supply chain against cyberattacks for more on the current state of the digital supply-chain ecosystem.
For more BSI insights on other EHS and Digital Trust topics, visit our Experts Corner. For real time updates on top supply chain issues, register for BSI’s Connect SCREEN tool; this platform provides daily analysis on the latest and most relevant global supply chain trends.