Author

Fayola-Maria Jack

Published

3 June 2026

Estimated Read time

6Mins

Fayola-Maria Jack, founder of Resolutiion, asks what businesses can still control when volatility hits

COVID left a permanent mark on global supply chains, from sudden operational shutdowns and force majeure claims, to labour shortages and an almost universal inability to deliver goods and services as expected. 

It was largely a capacity crisis. Businesses scrambled to keep supply chains functioning at all and many assumed it would permanently change how organisations approached resilience. Yet as the Iran conflict began to unfold in March, supply chains were once again forced to absorb new pressures while also dealing with familiar commercial tensions.

COVID vs Iran: What’s changed?

The triggers have changed, but the underlying commercial tensions have not. Cost, control, accountability, and risk transfer have remained at the centre of supplier conflict when conditions deteriorate.  

We are, again, seeing disputes around delayed deliveries, stockpiling, unilateral price increases, cash preservation and disagreements over who absorbs unexpected cost escalation. The psychology is also familiar, uncertainty makes parties more defensive, more transactional, and more focused on protecting margin and liquidity.

However, the impact of the Iran conflict is less a repeat of COVID and more an evolution of it. The pressure points are different: energy volatility, shipping disruption through key trade routes such as the Strait of Hormuz, rising insurance costs, sanctions exposure, cyber risk, and inflationary pressure are feeding directly into supplier pricing and delivery commitments.

Friction around contractual accountability is a major theme. Suppliers are increasingly seeking pricing adjustments, timeline extensions, or invoking force majeure when fuel costs, logistical bottlenecks, or raw material shortages affect delivery or performance. Buyers, meanwhile, are pushing back harder than they did during COVID and there is far less tolerance today for broad “global disruption” arguments. 

It’s also true that preparedness expectations have changed. In 2020, many disruptions were treated as unprecedented and unavoidable. Today, businesses are much more likely to ask whether a supplier should reasonably have anticipated geopolitical instability and built greater resilience into their operations. Resilience planning, alternative sourcing strategies, and geopolitical contingency measures are now commonly shaped as a demand for clearer responses to known risks. 

Visibility is another major difference. COVID exposed how little organisations understood their extended supply chains. Since then, companies have invested heavily in supplier monitoring, analytics and supply chain intelligence. As a result, disputes today are often more evidence based and commercially aggressive. Supplier claims are being scrutinised in far greater detail, particularly around cost pass-throughs, delays, and allocation of scarce inventory.

But, out of all these differences, what’s changed the most is the nature of commercial trust. COVID pushed businesses towards collaboration because everyone was experiencing the same crisis at once. The Iran conflict is much more fragmented and its impact is uneven across sectors, regions, and suppliers. It’s a key change that’s leading to more suspicion and tougher negotiation positions rather than collective problem-solving.

We are also seeing a wider shift from efficiency-focused supply chains towards resilience-focused ones. Businesses are reconsidering supplier concentration risk, geographic dependency, and just-in-time operating models. In many ways, the Iran conflict is accelerating a structural change that began during COVID: geopolitical instability is no longer an exceptional event. It is becoming a permanent commercial condition that businesses must be resilient to.

Why organisations are still caught off guard, despite past global disruptions

After any major disruption, resilience rises quickly up the board agenda. However, after a short period of adaptation, commercial pressure soon returns, pushing many organisations back towards efficiency, cost reduction, and short-term performance optimisation. 

In practice, suppliers are squeezed on pricing, inventory buffers shrink, and lean operating models reappear as quarterly performance pressures resume. True resilience requires long-term investment, cross-functional coordination, and uncomfortable trade-offs. Those are far harder to sustain without the right infrastructure.

There is also a tendency to prepare for the last visible crisis rather than the next emerging one. After COVID, organisations diversified suppliers, increased inventory buffers, nearshored selected operations, invested in visibility tools, and introduced more scenario planning. Those were important improvements. But many companies effectively strengthened resilience in ways that were highly specific to the pandemic and effectively prepared for “another COVID” rather than for a world defined by continuous and varied disruption.

Today’s risks are far more interconnected, with geopolitical, cyber, economic, and operational triggers compounding each other. However, many organisations still assess them in silos, rather than as part of a continuously shifting risk environment.

Advice for supply chain leaders going forward

The next decade is unlikely to be defined by isolated crises. Instead we can expect continuous and diverse events that trigger new instability and for disruption to become part of normal commercial operating conditions. 

Resilience therefore needs to be a leadership capability, not a logistics exercise. Supply chain leaders cannot control world politics or the economy. However, they can control the visibility they have, the quality of decisions made, actions taken under pressure, and the strength of the commercial relationships they foster. Three of the most practical strategies are:

  • Strengthening the supplier ecosystem before the crisis arrives 

Disputes happen frequently. Any organisation that suggests otherwise is simply not paying close enough attention to their delivery ecosystem. This doesn’t necessarily mean a claim, but instead an inability to find a prompt consensus on issues.

The strongest supplier relationships  are built before the crisis arrives, not during it. This means creating shared expectations early, clarifying escalation and resolution pathways, and understanding where friction is most likely to emerge if costs, lead times or delivery assumptions shift. 

  • Prioritising decision quality and speed

Success is determined less by contingency plans and more by the quality of decision-making and actions taken under pressure. When assumptions change, organisations need clear ownership, rapid escalation and the ability to assess commercial impact before delay becomes delivery failure or cost leakage. 

  • Treating commercial trust as operational infrastructure

Supply chains do not fail in isolation. They fail through weak visibility, delayed decisions, and fractured commercial relationships. For organisations to outperform during disruption they must be coordinated; able to surface conflict early, maintain trust under pressure and resolve issues before positions harden.  

Can resilience be a competitive advantage?

Businesses are no longer competing solely on product, price, or scale. They are competing on stability, adaptability, decision speed, and the strength of the relationships that sit behind delivery. Increasingly, resilience and conflict management are becoming measurable competitive advantages rather than simply risk management disciplines. 

In complex commercial environments, this is no longer built through reactive firefighting alone but through visibility, alignment, structured collaboration, and the ability to detect pressure points before they become operational or financial failures. Organisations must deploy the right processes and tools to proactively manage commercial friction, strengthen supplier and customer alignment. This will ensure issues are resolved earlier and businesses will outperform those still relying on fragmented processes and siloed communication.

The conversation is therefore shifting from “How do we survive disruption?” to “How do we outperform through disruption?” And increasingly, the answer lies in the quality, intelligence, and responsiveness of commercial infrastructure.

  • Risk & Resilience

Author

Juanjo Mestre

Published

22 April 2026

Estimated Read time

4Mins

Juanjo Mestre, CEO and Co-founder of Dcycle, digs into what supply chain leaders need to know about CSRD

For years, sustainability reporting focused largely on what companies could measure within their own operations, such as energy use, waste and direct emissions.

Under CSRD (corporate sustainability reporting directive), that centre of gravity is shifting into the supply chain. Emissions, resource use, labour practices and risk exposures increasingly sit several tiers beyond the reporting entity itself. Companies are no longer being asked simply to disclose sustainability metrics; they must now support them with supplier data that is traceable and able to withstand audit scrutiny.

This shift doesn’t just raise expectations for reporting, it fundamentally changes how supply chain data must be collected, managed and trusted.

At its core, supply chain data management is about how organisations collect and manage supplier information to support both day-to-day operations and long-term decisions. Historically, that information has centred on cost, quality and delivery. Sustainability introduces a new layer: carbon intensity, material origin, process data, certifications and social indicators.

CSRD brings sustainability into the same accountability space as financial reporting. Yet our research shows that just 19% of business leaders fully trust their ESG data, compared with 68% who trust their financial data. That gap highlights the urgency of building financial-grade systems for sustainability information.

Data must be consistent and defensible. Achieving that requires clear structures, aligned processes and defined ownership across procurement, sustainability, finance and operations.

CSRD increases dependency on supplier data

CSRD doesn’t just expand disclosure requirements, it increases reliance on supplier data. Sustainability teams are becoming more dependent on procurement to gather ESG information from suppliers, many of whom are facing reporting requests for the first time, often from multiple customers and across overlapping frameworks.

The challenge is a structural one. Supply chains were not built with sustainability reporting in mind; they were built to move goods efficiently and at the right price. As a result, much of the data companies now need sits buried several layers down – patchy, loosely defined and difficult to validate with confidence.

A common misconception is that supplier ESG data simply needs to be collected. In practice, it must be aligned, checked and contextualised before it becomes usable. What companies receive is often estimated, based on differing methodologies, or tied to mismatched timeframes.

This creates a reliability gap between what is reported and what can be defended. Under CSRD, that gap becomes a material risk. Numbers need a clear trail behind them. Generic averages and opaque assumptions are increasingly difficult to justify, particularly as limited assurance is already required and deeper scrutiny will follow.

Some reports may appear complete on the surface but fail under audit or stakeholder challenge. That is where exposure lies.

Why spreadsheets and point tools break down at scale

Many organisations are trying to manage CSRD requirements using spreadsheets, email surveys and disconnected ESG tools. That may work during a pilot phase, but it quickly breaks down at scale.

Files drift across inboxes, assumptions become buried in formulas, and version control deteriorates. Over time, small errors compound into material risk.

Email-based supplier surveys create weak audit trails, while single-purpose tools solve narrow problems but rarely connect the full picture. As supplier numbers grow, control declines, teams spend more time chasing data than validating it, quality becomes reactive, and reporting turns into clean-up.

Audit-ready sustainability reporting depends on structured inputs and transparent methodologies. Supplier data must map to recognised frameworks, with calculation bases, emission factors and sources clearly documented. Validation should happen at the point of submission, not in the final weeks before a reporting deadline. Changes must be tracked transparently, not quietly overwritten.

The preparation window is closing

CSRD readiness is not a last-minute reporting exercise. It depends on the maturity of supplier data, the consistency of methodologies applied across tiers, and the infrastructure in place to collect and validate that information. None of this can be built in the final weeks before filing.

The organisations making real progress are treating CSRD as a supplier data transformation effort. They are mapping supplier dependencies, identifying weak points and putting structured collection and validation processes in place now.

Because once reporting is assured, the question is no longer whether you have a number, it’s whether you can stand behind it.

  • Sustainability

Author

Andrew Woods

Published

24 March 2026

Estimated Read time

3Mins

At Manifest 2026, one theme is impossible to ignore. The conversation across supply chain, procurement and finance has shifted from…

At Manifest 2026, one theme is impossible to ignore. The conversation across supply chain, procurement and finance has shifted from visibility and analytics towards autonomy and execution. Few companies embody that shift more directly than Freehand, whose co-founder Nitin Jayakrishnan is focused on redefining how enterprise work gets done…

Freehand builds AI agents for procure-to-pay processes across complex spend categories, working primarily with large global enterprises across manufacturing, distribution, retail and services. The company’s aim is not simply automation, but a fundamental redesign of how operational teams function, combining human teams with AI “employees” to reshape procurement, logistics and finance.

Speaking at Manifest, Freehand co-founder Nitin Jayakrishnan argues that many enterprises are still structured for a world that no longer exists. “And the response has been the same for 30 years,” he explains. “More people, more outsourced teams, more BPOs. That playbook doesn’t scale anymore.” 

Which is where Freehand can help. A newly launched, agentic AI platform designed for supply chain and spend management, emerging from stealth in February 2026, Freehand replaces manual, BPO-heavy workflows. It acts as an AI-powered alternative to traditional Business Process Outsourcing (BPO) by automating complex, high-friction tasks like freight audit, payment processing, and procurement.

Living with permanent disruption

Supply chains are no longer temporarily volatile. Instability has become structural. “There used to be a time when enterprises thought of supply chain costs as unpredictable,” Jayakrishnan tells us. “It’s now been going on for so long… five, six years… almost every quarter you’ve had either a large global pandemic or a war or a trade war or a tariff or a compliance issue.”

Because of this, the largest organisations are no longer planning for predictability. They are planning for agility. They need to sense change continuously and react immediately. Yet many still struggle to do so. According to Jayakrishnan, the problem is not a lack of data, but the wrong kind of data.

Enterprise systems record transactions, but they do not capture context. They document what happened, not why decisions were made. “They capture the ‘what’, but they don’t capture how you got there,” he explains. “The ‘why’ of how decisions are taken is not captured in software. It’s captured in emails, in phone calls, in documents, in spreadsheets.”

Without this context, organisations cannot respond effectively to disruption. Even if they could see everything, acting quickly would still be difficult without autonomous decision-making. “You can’t depend on hundreds of thousands of teams and people to decide and act in real time,” he says. “That takes months, not minutes…”

Read the full story here!

  • Events
  • Together in Events

Author

Nell Walker

Published

12 November 2025

Estimated Read time

4Mins

Expert feedback says retailers are unprepared for Extended Producer Responsibility (EPR) rules around packaging

Josh Pitman, Managing Director at sustainable packaging firm Priory Direct, has warned that retailers are unprepared for Extended Producer Responsibility (EPR) rules around packaging, for which fees went live in October, with the firm fielding hundreds of customer queries. 

EPR fees came into play from 1 October for ‘large’ producers including many affected retailers and Pitman, whose firm supplies planet-friendly packaging to more than 21,000 businesses, says: “The retail sector is simply not prepared for this shift in how their packaging data needs to be reported, and the fees payable based on weight, material and recyclability of packaging. This is particularly true of the ‘majority middle’, or those that fall just over the threshold. 

“We know this because for many weeks, we’ve been dealing with between five and ten queries daily from our customers on our website chat function and directly to account managers. Many of these are basic questions like: does EPR apply to them, what data do they need to share, where do they get this from, and how do they reduce exposure to it? These are all basic but critical details that should have been established months ago, as reporting requirements have been in play since 2023. 

“However, there appears to be a lack of clear, helpful guidance and limited proactive engagement with affected businesses from government, aside from some overly exclusive and expensive events featuring official spokespeople. Knowledge of how to navigate EPR is being firewalled by companies looking to profit from guiding larger clients through the change when, for it to make the most impactful change, the government should be providing clearer, more-open-access guidance on how to use this legislation to actually make a positive improvement to the impact of their business.” 

He adds: “This means it is falling to the private sector to give practical support to retailers, who are seeing headlines like John Lewis revealing a £22 million cost through EPR and are rightly concerned. Without this support, these businesses would struggle to respond to EPR legislation and – what is most crucial – adopt more sustainable packaging choices to limit their exposure to the fees. Otherwise, there is a real risk that business will simply absorb the fees rather than do what EPR is designed to achieve, which is to spur a switch towards more environmentally friendly packaging.” 

Extended Producer Responsibility has changed the way UK organisations responsible for packaging must carry out their recycling responsibilities. For the purposes of EPR, packaging is defined as any material that is used to cover or protect goods that are supplied and that makes handling and delivering goods easier and safer. It includes anything that’s designed to be filled at the point of sale, such as a coffee cup. This definition encapsulates a wide range of businesses including many retailers.  

‘Producers’ are defined as either ‘small’, with annual turnover above between £1 and £2 million and importing or supplying 25 to 50 tonnes of packaging, or ‘large’, with a turnover above £2 million and importing or supplying more than 50 tonnes of packaging. Both small and large producers must report their packaging data, but currently only large producers need to pay fees. These producers will have received their very first invoice – or Notice of Liability (NoL) – this month, October 2025. 

Pitman concludes: “This is a real opportunity for all retailers to minimise their exposure to EPR by switching to more sustainable alternatives. The cost of these alternatives is, in the majority of cases, the same or lower, as well as incurring lower EPR fees, and such steps also help to reduce the overall environmental impact of these retailers. This is a positive move at a time when legislative and consumer pressures on retailers around ESG are growing. With clearer, more practical guidance for those affected, EPR is the carrot that could make a dramatic difference to retailers’ impact on the planet.” 

  • Risk & Resilience

Author

Dave Howorth

Published

1 July 2025

Estimated Read time

4Mins

Dave Howorth, Executive Director at global supply chain and logistics consultancy, SCALA, discusses the ways in which food scarcity can be adjusted to.

Empty supermarket shelves are becoming increasingly common in the UK; they act as an unsettling reminder of just how fragile our food supply has become. From climate-driven crop failures abroad to shifting political alliances and trade tariffs, the systems we rely on to stock our fridges are under increasing pressure. Once optimised for speed and cost-efficiency, today’s global food supply chains are straining under the weight of unpredictable and often overlapping crises.

The UK is heavily reliant on food imports, which renders it particularly vulnerable. Disruptions abroad can lead to ripple effects on domestic prices, availability, and consumer confidence. It’s imperative for retailers, food manufacturers, and logistics providers to reassess sourcing, transportation, and forecasting strategies to ensure food security for the long-term.

Climate and trade disruptions

Recent research underscores the vulnerability of specific crops. For example, a report by Christian Aid warns that climate change poses a severe threat to bananas, the world’s most consumed fruit and a dietary staple for over 400 million people. Alarmingly, by 2080, nearly two-thirds of banana-growing areas in Latin America and the Caribbean may become unsuitable. This is due to rising temperatures, extreme weather, and climate-induced pests. And this is not the first crop which is vanishing from UK shelves; recent reports highlight that oranges, grapes, and even tinned sardines have all been in short supply, demonstrating the very real threat of food scarcity.

Simultaneously, Trump’s tariffs could exacerbate the UK’s challenges when it comes to accessing affordable imports. Whilst the recent US-UK trade agreement has introduced certain concessions, significant challenges persist. Crucially, tariffs can lead to higher prices for imported goods, affecting both producers and their consumers in turn. Combined, these factors contribute to a volatile food system which could struggle to deliver consistent, affordable supply.

Building resilience: strategic imperatives

The good news is that a strategic, long-term approach to sourcing can help cultivate food security. The following approaches can make all the difference when it comes to building this resilience.

1. Data-driven forecasting

Advanced analytics and scenario planning are critical tools in navigating changing circumstances. AI-powered forecasting models can assess historical sales trends, climate patterns, political risk indicators, and market signals, enabling supply chain leaders to anticipate potential shortages and make informed sourcing and stocking decisions. However, accurate forecasting depends on quality data, necessitating transparency and collaboration across the entire supply chain to ensure everyone is working from the same point of ‘truth’.

2. Diversified sourcing

Relying on a single region or supplier for essential goods is a recipe for future disruption. Developing multi-sourcing strategies that include a mix of global, regional, and local providers can enhance resilience – ensuring that if one supplier can’t provide, a contingency is already in place to meet demand. While this approach introduces a level of complexity, it enables agility in responding to disruptions – whether by shifting to alternate trade partners or tapping into contingency inventories.

3. Collaborative resilience

The pandemic only underlined the necessity of supply chain collaboration and agility. Joint planning between manufacturers, retailers, and logistics providers can enable smarter demand sensing, shared transport solutions, and strategic stockholding that protect availability and the flow of product during turbulent times. Initiatives like shared visibility platforms and collaborative planning forums facilitate a shift from reactive to proactive resilience-building.

4. Nearshoring considerations

Interest in nearshoring or reshoring food production is growing as businesses seek to reduce reliance on vulnerable global trade routes. While challenges such as higher labour and land costs exist, nearshoring can offer greater control, shorter lead times, and reduced exposure to geopolitical risk. However, its feasibility depends on product type, resource availability, and long-term infrastructure investment. As such, nearshoring needs to considered as one component of a broader resilience strategy that is unique to each business.

Strengthening the foundations of food supply

To navigate the road ahead, businesses should shift from an efficiency-first mindset to one that equally prioritises endurance and adaptability. This entails investing in forecasting tools, diversifying sourcing strategies, embracing collaboration, and considering structural changes like nearshoring. Food scarcity is not inevitable – but avoiding it requires rethinking the supply chain.

  • Sourcing & Procurement

Author

Andrew Woods

Published

16 July 2024

Estimated Read time

6Mins

Without a critical supplier, entire operations for an organisation can come to a halt.

Most modern organisations rely heavily on their supply chain partners to deliver their products and services. In the case of critical suppliers, organisations might not be able to provide most of their products and services without them.  Resilience is key!

In some cases, without a critical supplier, entire operations for an organisation can come to a halt. For example, if the point-of-sale (POS) service provider is down at a retailer, they cannot bill their customers. Disruptions can strike unexpectedly, causing significant financial losses, operational challenges, and reputational damage.

Over the last few years, supply chain disruptions have gained much more executive attention due to Covid-19 and geopolitical conflicts, but they have been happening all the time even before.  

In this article, Robin Agarwal, Head of Supply Chain and Operations Services at 4C Associates explores the importance of resilience in supply chains and practical strategies to enhance it. 

Supply chain disruptions can happen due to many reasons, some of the most common are: 
 

Financial disruption 

A critical supplier suddenly going out of business is the biggest nightmare for senior supply chain executives. In most cases, the organisation should have alternate options, but it can take weeks, if not months, to ensure the return to business as usual. I have seen in many of my clients, procurement and supply chain executives spending weeks and weeks of dedicated time to resolve supplier bankruptcy issues while suffering significant disruption in their operations and financial losses.

Even smaller cash flow problems can take a toll on supplier performance, where I have seen suppliers not being able to fulfil the orders as needed as they are not able to pay on time for their operations and supply chain. 

Reputational damage 

Organisations today face intense scrutiny from the media, customers, and increased ESG regulations. A negative ethical or social incident (child labour, environment violations etc.) within your supply chain, especially when it comes out in public, has a huge reputational impact on the organisation. Executives have to react quickly in such cases and make changes to ensure integrity in their supply chain. During the horsemeat scandal I saw significant resources at my food manufacturing client going into reviewing the supply chain and marketing money going into assuring the customers. 

Geopolitical tensions and sanctions can impact suppliers’ ability to deliver goods or risk. Organisations operating with global supply chains need to assess and mitigate these risks. Complex manufacturing organisations saw massive disruptions in their supply chain in the aftermath of Ukraine-Russia war. A major area of focus for organisations today is scrutinising their supply chain for dependency on BRICS nations. 

Natural disaster 

We all know what happened during the Covid-19 pandemic and how it prompted organisations to review their supply chain strategy. However, this is not a new issue. For example I was part of a risk and resilience project for a major automotive original equipment manufacturer (OEM) that was commissioned in the aftermath of Floods in Thailand paralysing their supply chain. 

Tier –N supplier disruption 

Most of the big suppliers have complex supply chains. Any impact on these Tier 2, 3 suppliers can create a significant impact as well, depending on how mature is your supplier resilience. This is the most common issue I come across. While most organisations consider these as their supplier problem, when happen, they need to bear the impact as well. 

The list above is not exhaustive and there are many other complex issues, ranging from cyber disruptions to boats carrying goods stuck in the Suez Canal. 

The false sense of security 

Many organisations operate under the assumption that supply chain disruptions won’t happen to them. They focus on cost efficiency and day-to-day operations, neglecting proactive risk and resilience management. However, this reactive approach can be detrimental when disruptions occur as there is no framework to deal with such disruptions. In these cases, senior management has to spend a significant amount of their time while incurring higher costs. And longer time to recover than their competition. 

Risk monitoring tools: Necessary but insufficient 

There are many tools available to supply chain professionals today from getting financial assessments of their suppliers, sanctions watch, to supplier ESG ratings. These risk monitoring tools help identify potential issues, but they often lack real-time predictive capabilities. Organisations receive retrospective alerts, leaving them scrambling to respond. Additionally, false alarms can lead to decision paralysis.

At the time of Carillion’s bankruptcy, none of these tools were able to give any actionable warning to the companies. Also, most organisations have an extensive risk framework for onboarding a new supplier, but they don’t have an effective risk framework once the supplier is in operation. And dependency increases over time with warning signs, if any, ignored. 

The case for resilience 

Resilience is the antidote to vulnerability. While organisations cannot predict every risk event or control how the events unfold, it is in their gift to build adaptive capacity to withstand shocks and recover swiftly. Here are some of the basics for how organisations can enhance supply chain resilience: 
 

  1. Supply market resilience 

Overreliance on a single supplier or a geographic location affects resilience. Organisations should consciously diversify their supplier base, even if it means higher short-term costs. Also, they should know the alternate suppliers that operate in the market and have relationships with them even if they have no immediate plans to change suppliers. It would not only enhance resilience, but also help improve cost. 

  1. Know your supplier 

Understand the key dependencies with your supplier including within their supply chain. A mature organisation should know the key people to reach out to in case of disruption. And who they should even bring on board if the supplier goes bust. 

  1. Contingency Planning 

Develop clear contingency plans for various disruption scenarios. These plans should outline roles, responsibilities, and escalation procedures. Ask your suppliers about their contingency plans and how they will ensure business continuity when various risk scenario unfolds. 

  1. Operational Resilience 

Have Contingency-SOP instructions in place. Capture the specifications and know-how on what suppliers are delivering so alternate options can be switched on swiftly if needed.  

However, just having contingency plans written is not enough. Contingency plans must be stress-tested for viability and supply chain and business stakeholders ‘fire-drilled’ through those plans, so they are aligned on key steps when disruption happens, and precious time is not wasted arguing about the next steps. True resilience is an organisational culture and employees at all levels should understand their roles during disruptions. 

An ongoing process

As concluded by Christopher Jones, Procurement Director at Alstom, “Resilience planning needs to be an ongoing process, your supply base and requirements are constantly evolving.  Having stress tested plans means that when disruption lands your teams are ready to act and deal with the issues.”  

Supply chain disruptions are inevitable, but organisations can minimise their impact through resilience. By embracing proactive risk management practices and fostering a resilient culture, organisations can navigate disruptions with confidence and stay ahead of the competition. 

Read the full issue of SCS here!

Author

Andrew Woods

Published

Estimated Read time

6Mins

While environmental and climate change used to be the main topic of discussion, human rights and supply chains have taken over

In recent years, supply chains gained momentum as the leading social issue for companies to address. While environmental and climate change used to be the main topic of discussion, human rights and supply chains have taken over. This is partly due to the scandals and allegations of exploitative labour practices from multinational companies. But also due to the increased public awareness of the role companies play in determining the management of their own supply chains.

Social sustainability

The shift to focus on social issues acknowledges the profound impact that supply chains can have on our communities, labour rights, and societal well-being. Progress has been made in greening supply chains, but addressing social sustainability is a complex challenge yet to be achieved. A holistic approach that integrates social responsibility in a meaningful way into every aspect of the supply chain is the way to go. Then businesses can make a difference in the long-term.  

Understanding the social issues in supply chains 

First and foremost, we need to understand what the risks and impacts are in supply chains. These largely depend on the industry and the part of the world where a given company works. Social sustainability in supply chains encompasses fair labour practices, human rights protection, community engagement, diversity and inclusion, and ethical sourcing. Building social sustainability requires a more thorough look at these issues: 

  • Labour exploitation 

Supply chains often involve complex networks of subcontractors and suppliers. This can lead to challenges in monitoring and ensuring fair labour practices. Exploitative conditions such as low wages, long hours and unsafe working conditions can be prevalent, especially in industries like manufacturing and agriculture.  

  • Worker welfare 

Ensuring the well-being of workers throughout the supply chain is essential. This includes addressing issues around child labour, forced labour, discrimination, lack of access to essential benefits like healthcare. Issues around exploitation and worker welfare are especially troubling in the gig economy or in sectors with seasonally contracted workforce.  

  • Labour rights violations 

Encompassing the restriction on freedom of association and collective bargaining. I have had several clients whose subcontractors employed workers without employment contracts, completely violating local labour laws.  

  • Human rights risks  
  • Ethical sourcing 

Companies face challenges in ensuring that their supply chains are free from human rights abuses, modern slavery, human trafficking and exploitation. Ethical sourcing policies and enhanced due diligence can screen out suppliers who can’t comply with legislation.  

  • Conflict minerals 

Sourcing minerals from conflict-affected regions can contribute to human rights abuses and armed conflict. Companies can implement measures to trace the origin of minerals and avoid financing conflict or further contribute to human rights violations.  

  • Indigenous rights 

Many supply chains involve land acquisition for resource extraction in areas inhabited by indigenous communities. Respecting Indigenous rights, including land rights and cultural heritage is crucial to avoid access restrictions to natural resources.  

  • Community and land-related aspects  
  • Land displacement 

Though, we previously mentioned land issues in relation to indigenous people, supply chains might lead to land grabs from other communities. Proper consultation, compensation and resettlement plans are necessary to mitigate the negative impacts on affected communities.  

  • Community engagement and development 

Enterprises have the responsibility to contribute positively to the communities where they operate. In certain developing countries, these manufacturing facilities provide the only ‘good’ jobs and communities rely on them economically. Engaging with the communities and supporting local development through CSR programs is a popular way for companies to build lasting relationships.  

Strategies and Tools for Enhancing Social Sustainability  

Achieving social sustainability in supply chains requires a multifaceted approach that integrates social considerations into every stage of the supply chain lifecycle. When I work with my clients, I always look at three key pillars: legal requirements, voluntary standards, and management systems.  

The EU’s adoption of the new directives specifically targeting human rights and environmental impacts in supply chains adds to the long list of legal requirements companies need to follow to address modern slavery risks and practice corporate responsibility globally. Most of the legislation is not prescriptive in terms of what needs to be done exactly. But they do require companies to enforce corporate level standards on suppliers. Some companies have started including standard contractual clauses that require suppliers to follow legislation and adhere to the company’s policy on social topics.  

    Voluntary standards and certifications 

    There is a wide variety of voluntary standards and certifications that companies can explore on their social sustainability journey beyond legal compliance. Plus, there are certifications on Fair Trade, SA8000, Ethical Trading Initiative (ETI) Base Code and decent work. There are also some more sector specific standards and certifications such as ethical fishing for food producers. It is up to companies to decide if they want to improve their practices by updating systems in line with best practices.

      Supplier collaboration

      Supplier collaboration through the provision of capacity building and training are great tools to raise awareness on labour rights, health and safety, diversity and inclusion and support suppliers to establish their own traceability systems. Typically, the supplier code of conduct is a legal requirement, but it could be extended to include more detailed expectation. These might include labour standards, human rights, environmental practices and ethical business conduct.  

      I would consider community investment through CSR programs as a voluntary initiative that allocates resources towards community development. It is ideally driven by the needs of locals and might include a combination of paying for services and providing training or education.  

      Management systems  

      Company management systems include the collection of policies, processes and management plans. Most of the policies are legal requirements as per my previous points. However, there can be additional policies focusing on areas where the company is exposed to risks in the supply chain. For example, HR policies typically include minimum age requirements.

        Although, if the risk of child labour is relevant to the company, they might decide to have a separate policy on the prohibition of child labour. Following on from this example, a management plan would identify the risk of child labour. Whether it is for direct employees, contractors or subcontractors. This will describe a process to verify, record, audit and report on the age of workers. Supply chain specific management plans might include traceability and mapping, a supplier management plan, a supply chain risk assessment plan etc.  

        Stakeholder enagagement

        The other important aspect of a company’s management system is stakeholder engagement and complaints management. Effective stakeholder engagement can facilitate the feedback mechanism from communities and workers in the supply chain.  

        Creating socially sustainable supply chains is not just a moral imperative. It is also a strategic business imperative in today’s interconnected world. If we prioritise social responsibility by embedding it into the operations, businesses can mitigate risks, enhance reputation and create value for society. Ultimately, building social sustainability requires a collective effort involving businesses, governments, civil society and other stakeholders.

        We need to work together towards common goals to create supply chains. Not only to deliver economic value but also promote social justice, equity and dignity for all.  

        Ildiko Almasi Simsic is a social development specialist and Founder of E&S solutions which has developed the world’s first E&S specific research assistant – myESRA™.