You’ve probably(?) just finished budget season.
Or maybe, you’ve just made it through earnings season.
Perhaps—both. And the paper bag you’ve been using to exhale rhythmically into for the last few months has worn thin. It’s now crumpled and soft.
It’s your bag (your personal, crumpled and soft, paper bag), and you’re only ever looking in one direction when you’re using it. The bag-to-hand respiratory action yields a singular, myopic view. The more you use it—in fact—the more you’re looking in the direction of the bag. And that direction is down. Down the bag and passed the bag to the floor. It’s a negative, self-prophesying direction where distress breeds distress, and disruption is a continuous string of events instead of a passing moment.
For supply chain leaders—when we talk about resiliency, are we describing the ability to react, breathe, and focus on a safe and familiar view?
Are we talking about a repeated action that tears the fabric of a mechanism that should be used sparingly?
Is it the bag or the person—that is resilient?
In Any Event, It’s Not a Waiting Game.
There will be more shocks to the chain. More resiliency will be required of us, yet.
As of Q3, Chapter 11 filings were up by 21% compared to last year (depending how you look at the numbers). Along with a potentially lackluster retail holiday period, a pandemic that continues to sweep the globe, and the looming end to another credit cycle—there are many supply-chain-reasons to breathe shallowly.
But the businesses that continue to thrive are looking at expenditures strategically (in the near and medium term too) rather than waiting to see what lies ahead in 2021; and not just riding the doom patrol to see which vendor shows up in the news.
According to a recent McKinsey study, resiliency—itself—is an active state that requires calculated capital:
“Preparing for future hypotheticals sometimes has a present-day cost. But if those investments focus on digitally connecting the entire value chain from end to end, they can pay off over time—not only minimizing future losses but boosting productivity and strengthening entire industry ecosystems today.”1
“Over the course of a decade, companies can expect disruptions to erase half a year’s worth of profits at a minimum.”2
And the kicker?
"Stability may be emerging as a key metric for measuring corporate performance. Resilience may be a new element considered alongside environmental impact and social purpose as investors and customers assess companies."3
The right investment in data, analytics, and digital technologies can not only improve the financial health of you and your business partners through transparent, objective information—but it can also make you more competitive.
And It Begins with Perspective.
RapidRatings’ CFO, Pete Tantillo, stated in a recent interview, “Business’ risk and health aren’t enemies — they’re fraternal twins.” Opportunity isn’t inherent, it has to be found, interpreted, and actioned on. And there is treasure yet, in your chain even among your private suppliers who may be strained.
For example, our Co-Head of Product, Jarrod Shandley mentioned in a November article from Treasury Today that “many of our clients with global supply chains have been accelerating payments to suppliers to keep their operations flowing.”
Those clients are only able to seize the moment, when their private suppliers (whom they depend on) are able to provide them with additional perspective. And that begins with understanding their financial health through:
- Predictive methodology providing early warning of an increase in vendor risk.
- Financial statement collection process providing in-depth analysis into the risk level of private vendors.
- Portfolio reporting and alert functionality to trigger risk mitigation workflows faster.
- Standardized explanatory reports that break down the financial risk of both public and private vendors.
So keep the paper bags (we all need them sometimes)—but use them less. Because resiliency requires perspective and perspective is dependent on information.
To begin using the right information for your company’s present and future resilience, click here.
 https://fortune.com/2020/11/16/supply-chain-shock-risk-resilience-covid-mckinsey/ [