Companies Urged To Prepare Supply Chains For Disruptions
As the COVID-19 pandemic has revealed, many organisations around the world were unprepared for such large scale disruptions. The report from The Sustainability Consortium (TSC) and HSBC raises the issue that climate change disruptions could raise costs for supply chains and jeopardize entire operations, and the ability to meet the needs of consumers and customers.
The report, titled “Improving Supply Chain Resilience to Manage Climate Change Risks” was funded and supported by the HSBC Centre of Sustainable Finance, and warns that the ongoing changes in the climate will result in more severe disruptions.
Extreme weather events will become more frequent and disruptive, rising sea levels will continue to disrupt supply chain configurations more and more frequently. The concern with climate change-induced disruptions is that they can lead to long-term increased costs, lowered quality and lower quantity of supplies provided to manufacturers by suppliers.
Dr. Kevin Dooley, co-author of the report and Chief Scientist at TSC, said “We all see the myriad of supply chain disruptions occurring during the current coronavirus pandemic. Unfortunately, this prefaces the types of challenges that supply chains will face in the future from increasing climate change. Now is the time to create more supply chain resilience.”
“As companies worldwide are in the midst of dealing with COVID-19’s impact on their business operations and their supply chains, current events put in sharp relief the impact of supply chain disruptions on a global scale,” said Patricia Gomes, Regional Head of Global Trade and Receivable Finance
Investor attention may be diverted by climate change risks and disruptions, to increase attention on company’s supply chains and the greenhouse gas emissions produced by it. Climate change must be incorporated into broader supply chain risk management strategies to avoid this.
A company’s ability to withstand events that could disrupt the supply chain can be enhanced by bridging and buffering strategies. This can help to protect against inevitable failures and disruptions. Increased cost, lower quality supply, delayed supply and delayed delivery of goods should all be covered in the planning for risk events.
A company that has clearly planned and prepared to become more resilient will naturally be more attractive to consumers, customers and investors. Following a risk mitigation and management strategy, with climate change incorporated will not only create a more resilient supply chain, but a more attractive one too.
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.