Pandemic driving new supply-chain risks
Source: Middle East Insurance Review | Jun 2021
COVID-19 will create fresh supply-chain risks in 2021 after disrupting the global flow of operations in 2020 according to business standards group The British Standards Institution (BSI).
The annual Supply Chain Risk Insights 2021 report of BSI identifies the trends and associated risks likely to impact global supply chains. The report predicts the following trends will likely dominate the global supply chain during the current year:
- Ongoing challenges from COVID-19 to create new threats for organisations in the coming months;
- Economic hardship increases the risk of labour exploitation, human rights violations and stowaway smuggling;
- Drug smuggling trends remain consistent, however, means and methods will continue to change and evolve due to COVID-19; and
- Food fraud and safety will continue to challenge supply chain resilience.
The BSI report said economic hardship is also expected to increase the risk of forced labour within supply chains. These risks will “challenge organisational resilience and business continuity, as the world continues to grapple with the lingering impacts of the pandemic”.
Increased regulatory oversight of supply chains and their risks is expected in line with that seen in the US and “a wider range of organisations will have to adjust their business practices”, according to the report.
Natural disasters are one of the best known causes of supply chain disruption and continuity risk, but the BSI said the ongoing pandemic has exacerbated this threat.
“Natural disasters are increasingly creating both business continuity and security concerns around the world. This trend is seen as intensifying in 2021, given the ongoing disruption from COVID-19 combined with repeated storms, earthquakes and other types of natural disasters.”
BSI said the impact of natural disasters does not stop at facility or infrastructure disruption but can spark protests and blockades. Besides adding security concerns, these types of incidents can hinder other operations, such as the ability to obtain insurance. M