Ongoing pandemic challenges create new threats to global supply chains

Regulatory changes, food fraud and the ongoing effects of COVID-19 are all potential causes of supply chain disruption in the year ahead, according to a new BSI report.

The Supply Chain Risk Insights Report warns of ongoing challenges from the pandemic creating new threats for organisations in the coming months, but suggests a host of other potential factors also need to be factored in to ongoing planning. It says economic hardship increases the risk of labour exploitation, human rights violations and stowaway smuggling, while continuing evolution of the means and methods of drug smuggling will also represent a moving threat. Food fraud and safety will continue to challenge supply chain resilience while broader regulatory changes will test organisational adaptability.

“COVID-19 will certainly have latent effects on organisational resilience throughout 2021, directly and indirectly shifting the way organisations do business,” said Jim Yarbrough, global intelligence program manager at BSI. “However, several other challenges, including increased regulation of supply chains and forced labour are poised to challenge organisational resilience and business continuity as the world continues to grapple with the lingering impacts of the pandemic.”

The report found that many of the COVID-19 related challenges that organisations faced in 2020 forced them to adjust in novel ways to maintain their supply chain continuity, integrity, and overall resilience. Yet, at the same time, the spread of the virus seemed to merely exacerbate historical trends and known risks such as cargo crime, man-made disruptions and political protests, which all remain as risks to supply chain resilience in 2021.

It noted an increase in thefts from facilities in Africa and Europe and an overall increase in stolen medical supplies last year. However, despite these changes noted in the BSI incident data, some trends remained the same, such as in Latin America, which continued to experience a high number of hijackings, and the United States and Canada saw consistent trends in the targeting of trucks parked in vulnerable locations.

In 2020, governments passed a range of regulatory and legislative measures that will continue to affect supply chains and are likely to challenge organisational resilience by creating new compliance measures aimed at increasing sustainable sourcing and improving supply chain security. The BSI report warns that it is almost certain that organisations will have to increasingly scrutinise the supply chain for susceptibility to labour violations, as a number of governments made a concerted effort to address this issue.

In addition to regulation aimed at eliminating the use of forced labour in the supply chain, regulatory developments surrounding sustainable sourcing and deforestation, as well as cargo and port security, will impact organisations throughout the year ahead.

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