Ever since the beginning of the decade, back in 2020, the world has bear witness to a series of terribly disruptive events. In less than five years, we have dealt with a world-wide pandemic—and its subsequent recession, increasingly extreme weather conditions often attributed to the rapidly increasing effects of climate change, and wars in both, Eastern Europe and Asia.
Society has continuously decided to persevere even in the face of daunting calamities. For businesses, it is important to keep the materials moving. In fact, according to the business consultancy firm McKinsey & Co., safeguarding the survival of active supply chains operations becomes more important than ever when we’re faced with a crisis. However, resilience might only be achieved through efficient risk management, collaboration and transparency.
As part of their initiatives to promote “power rationing”, the Chinese government has moved to rationing electric power to its manufacturing businesses, resulting in factories closing in response to high energy prices. On top of that, factories that remain in operation have severely reduced their capacity.
Adding to the current situation and with the aim to curb the spread of infection across their territory, the Chinese Government has implemented a zero-COVID policy that limits mobility to and from all their cities, causing most non-essential services to close down.
These series of events have converged in what the New York Times labeled as “The Great Supply Chain Disruption”. Manufacturers, suppliers and brands now face a huge level of uncertainty from factories operating out of China.
With all certainty, the responses to these drawbacks will determine how well we respond to the next ones. We believe there are some steps you can take to strengthen your supply chain and make it fit to navigate the next global crisis.
Improve your supplier relationships
While understanding the actual situation in your suppliers’ facilities is a key factor for making good decisions, it provides no long-term solution to urgent problems. Make sure supply chain representatives are in contact with the facilities you rely on for your business operations. Guarantee access and understanding of tools necessary to get a true reading on what’s happening on a day-to-day basis.
Keep a close eye on your manufacturing processes
On the same note, keep in mind that quality suffers most when things get rushed. Since suppliers from all over the world are likely struggling to meet the demands of their consumers, there is no doubt that some factories will begin rushing orders due to China’s limited working days, which may result in significant variations in the final product’s expected performance or appearance.
Using standardized processes for social and labor data collection may help mitigate any labor risks in your supply chain.
We can help
To secure the production of high-quality products while achieving production goals and maximizing their profitability, it is essential for factories to engage in the best business practices as possible and position themselves among competitors. By implementing a Converged Assessment Framework (CAF) for social and labor data collection, the Social & Labour Conversion Program (SLCP) envisions to bring together unique perspectives to create an efficient, scalable and sustainable solution for social audits.
By encouraging third-party suppliers to get their processes audited, brands are providing an alternative to physically tracking their processes. Take the first step on your path towards improving every step of your supply chain and contact us.