Forced labor, tariffs, theft, and digital security
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April 6, 2023 - Natural disasters, geopolitical events, and inflation are leading to major supply-chain challenges for large and small companies alike, affecting organizations across the globe. To confront and mitigate these issues, organizations must start with implementing a comprehensive supply chain risk management strategy that focuses on regulatory requirements and outlines how a company identifies, assesses, and mitigates risks that could disrupt supply-chain operations.
Continuously monitoring partners in the supply chain and assessing them at the onboarding stage results in better quality control and risk management. Monitoring means looking at the external regulatory and risk environments, the inherent risk in the types of contracting done with these suppliers, ways other businesses are engaging with their suppliers, and the types of suppliers themselves. It can be a tricky situation to navigate, often leading companies to ask: how does one make risk part of the conversation with suppliers while working with those suppliers on a regular basis?
Going forward, the chemical industry will need to focus heavily on regulatory risks to see if they have enough (or any) visibility into their suppliers’ practices. There are strong drivers in the industry to make risk management a part of regular business reviews with suppliers. An organization may have a large number of suppliers, making auditing of them all unrealistic unless there is a strict regulatory requirement already present. However, auditing them on a risk-based basis is critical. Regular auditing means more ways to get touch points with the supplier and makes it easier to discuss and ultimately remedy potential risks with them.
Alongside regulatory risks, cybersecurity is another important area to consider:
- How to assess cyber risks within the supplier base.
- What types of certifications suppliers should carry to mitigate any cybersecurity issues.
- How to plan and prepare for a ransomware attack or outage event.
It’s important to address all types of disruptions in operations and conduct exercises relating to continuity and incident management. Collaborating with suppliers while addressing regulatory requirements will help organizations better identify any potential disruptions or impacts to the business and what protocols should be used to respond.
Tony Pelli, along with participants from the legal and manufacturing sectors, will participate in a roundtable event focusing on global supply chain challenges, forced labor tariffs, and theft in digital security during the Ohio Chemistry Technology Council’s (OCTC) upcoming 34th Annual Conference, held on May 8-9 in Columbus, Ohio. Stay tuned for his update on the outcome of this event.
Register for the OCTC 34th Annual Conference; and read 2023 Supply Chain Insights: Part 1: Diversify to de-risk your supply chain to learn more as Tony examines the benefits of diversification to reduce risks within your supply chain.
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.