SMEs can be particularly vulnerable to supply chain disruptions. Four experts in this month’s Editor’s Question explain how SMEs can protest their supply chains, starting below with Chris Buchanan, Client Solutions Director, Dell Technologies South Africa:
For SMEs, reducing supply chain risks is fundamental to success and stability. Emerging technologies and automation solutions can help SMEs improve supply chain visibility, traceability and efficiency. Integrating these tools into their operations enables SMEs to anticipate and manage supply chain disruptions more effectively.
Of the emerging technologies, Artificial Intelligence capabilities such as Machine Learning, Deep Learning and Generative AI are the way of now and the future – and automating supply chains is one of the most prevalent use cases. In this increasingly digital world driven by massive amounts of data, the partnership between humans and machines becomes more important than ever.
For example, Internet of Things devices such as smart sensors can monitor the status and location of products throughout the supply chain, providing real-time data and enabling more informed decision-making. In addition, Blockchain technology offers a secure, transparent way to track and record transactions throughout the supply chain. SMEs can increase trust, traceability and accountability by giving all stakeholders access to this information.
Advanced analytics tools also enable SMEs to gather insights from supply chain data, uncovering patterns, trends and potential inefficiencies that can be addressed before they become critical issues.
Automation and advancements in software innovation can accelerate business transformation and simplify IT by changing who does the work.
By automating manual processes such as inventory management and order processing, SMEs can enhance efficiency and reduce the risk of human errors, enabling more dependable and streamlined operations.
SMEs need to be aware that the growing dependency on digital platforms and connected systems has significantly increased the threat of cyberattacks on supply chains. Protecting their businesses against these digital vulnerabilities requires diligent and proactive cybersecurity measures such as employee training and awareness, regular security audits and keeping all software used throughout the supply chain up to date.
It is also vital to build strong relationships with suppliers and partners through open and regular communication, shared goals and KPIs and supplier development programmes.
As the clear leader in compute and storage, Dell Technologies is at the epicentre of data-intensive technology such as AI. We provide SMEs with AI solutions and expertise that unlock the power of AI, automate intelligent decisions and help define their paths to the future. Our SME customers have the capability and flexibility to run AI workloads anywhere they need them and scale AI from proof of concept to production.
Will Gray, Director of Northern Europe, SecurityScorecard:
As organisations and individuals become increasingly dependent on digital infrastructure, cybercriminals are quickly adapting their tactics, techniques and procedures. The scale of the issue can seem daunting to SMEs, particularly when even the most well-prepared and well-funded security teams are sometimes no match for sophisticated threat actors. For instance, a recent report analysed the cybersecurity of the UK’s FTSE 100 and found that 97% of those companies had experienced a breach in their third-party ecosystem in the last year.
While large enterprises typically make the news in the wake of massive cyberattacks, the downstream impact on small- and medium-sized enterprises (SMEs) can be devastating. Take, for instance, the cyberattack on Change Healthcare, a major player in medical claims processing in the United States. With the company forced to disconnect over 100 systems, medical claims processing stopped, which brought many SME medical providers to the brink of closure.
So, what can an SME do to protect itself?
- Identify single points of failure
This means mapping the critical business processes and technologies to the people that power them to identify any single points of failure. Additionally, it’s key to figure out the third parties that Business Continuity depends on and create a ‘watch list’ to keep an eye on these ‘single point of failure’ vendors.
- Continuously monitor your external attack surface
Take advantage of automation to continuously scan your IT ecosystem for control weaknesses. From there, alerts will be directed to a security incident and event management (SIEM) system.
- Collaborate and communicate with vendors
Identifying cybersecurity concerns across your global vendor landscape and partnering with those vendors to improve is key. Use an automated solution that passively monitors your vendors’ IT deployments to give you valuable visibility into how well they manage cybersecurity risk.
- Operationalise vendor cybersecurity management
To save considerable amounts of time, employing a cybersecurity managed service can streamline vendor management for your business. Cybersecurity managed services can own communication directly with third parties to resolve issues on your behalf, including providing support that enables risk resolution.
- Additional cybersecurity measures
In addition to these steps, SMEs would benefit from increased employee awareness training to ensure that all staff members and stakeholders are trained in cybersecurity best practices. An organisation is only as strong as its weakest link, so teaching everyone how to recognise phishing scams or malware attacks is a key step in bolstering cyberdefences.
It’s also important for SMEs to periodically assess supply chain systems and digital processes for vulnerabilities, while also keeping all software used throughout the supply chain up-to-date, including security patches that protect against recently discovered threats.
Claire Brockdorff, VP, Global Procurement, Sage:
SMBs are 99% of the world’s businesses and we know they want to become more sustainable: our research tells us that that 83% of SMBs want to prioritise sustainability – they understand how it can make their businesses more resilient, especially in today’s climate of economic uncertainty – but they feel stymied by lack of know-how, funding and tech tools to help them measure their impact. There are some simple, low cost-steps that they can take to create sustainable supply chains.
Businesses of all sizes need to be trusted by everyone they do business with, and this means knowing your suppliers. This is as true for a company with 10 employees as for one with 10,000; all companies are expected to hold themselves to high ethical standards, regardless of their size. No one wants to be seen engaging with a company whose suppliers are associated with human rights or environmental harms, and even an indirect connection can be extremely damaging to a company’s brand and reputation. The same applies to dealing with suppliers buying raw materials that haven’t been ethically sourced or failing to protect customer data or avoid cyberattacks.
When selecting suppliers, ask basic questions around human rights: do they have a health and safety policy to keep employees safe? Do they pay a living wage? Do employees have reasonable working hours? Are they free to leave their jobs if they want to? While this is not an exhaustive list, asking key questions can provide assurance that the proposed supplier is not using child labour, for example.
Adopting a Supplier Code of Conduct is a good way to set expectations with your suppliers and secure their agreement to meet those expectations on a wide range of topics, such as those mentioned above, as well as anti-bribery and corruption and environmental performance. This can be displayed on a company’s website and shared with suppliers, along with a request to confirm agreement.
Many technology solutions are available, but by taking these simple, low-cost steps, SMBs can make positive strides towards creating sustainable and resilient supply chains.
It’s impossible to talk about protecting supply chains from risk without considering the environmental impact of supply chains. Carbon emissions from supply chains often make up the significant majority (often over 90%) of a company’s carbon footprint, and it’s incumbent on companies of all sizes to take action to reduce carbon emissions. Measuring emissions is the first step to accountability and action, there are plenty of useful resources such as The Climate Drive or the SME Climate Hub which can help you get started at no cost.
Reporting is an important next step. Currently, only 8% of SMBs report on their impact. Reporting could open up new financial, growth and employment opportunities.
At Sage, we expect our suppliers to align with our high ethical standards and have been working with SMBs in our supply chain as part of our Sustainable Supply Chain Strategy. Our strategy is specifically designed not just to give us the data we need but to help SMBs take action towards becoming more sustainable and protecting their supply chains. As more companies take these steps, a multiplier effect is created, with every company having a greater impact beyond its own.
Doug Brown, Head of Europe, Flexport:
SMBs face unprecedented challenges in managing their supply chains in the rapidly changing global market. From disruptions caused by global pandemics to geopolitical tensions and natural disasters, the need for a resilient and agile supply chain has never been more critical.
SMBs often lack larger enterprises’ resources and infrastructure, making them particularly vulnerable to supply chain disruptions. Common challenges include limited visibility and transparency, financial constraints, supplier dependence, operational inefficiencies and logistical complexities. Many SMBs struggle to gain real-time visibility in their supply chains due to divergent data sources and outdated methods, leading to data silos and gaps that hinder effective decision-making. Financial constraints and tighter budgets also limit their ability to invest in large inventory buffers or advanced logistics technology. Relying on a limited number of suppliers or geographic regions increases the risk of disruptions due to localised events.
A resilient supply chain provides improved reliability, allowing SMBs to anticipate and mitigate disruptions, ensuring more reliable delivery promises to customers.
To build a resilient supply chain, SMBs should consider several strategic and tactical approaches:
Integration and automation: Integrating various supply chain services into one cohesive system allows SMBs to streamline operations. Automating inventory management, customs paperwork and fulfilment processes can significantly reduce the operational burden, enabling more effective resource allocation.
Diversification of supply sources: Avoiding reliance on a single supplier or geographic region is crucial. Sourcing products globally reduces the risk of disruptions from localised events.
Enhanced visibility and transparency: Real-time tracking and analytics provide SMBs with a clear view of their supply chain from end-to-end. This transparency helps anticipate delays, manage inventory levels and meet customer expectations with reliable delivery promises.
Financial flexibility and support: Access to special financing options can be critical during disruptions. These capital solutions allow businesses to maintain cash flow, invest in additional inventory, or pivot strategies without immediate financial strain.
Building strong partnerships: Collaborative tools and platforms help SMBs work effectively with various stakeholders, from manufacturers to retail partners. Fostering these relationships and utilising comprehensive logistics networks can create a more robust and flexible supply chain.
Scenario planning and flexibility: Effective planning and flexibility are crucial for managing supply chain uncertainties. Booking shipments early and maintaining open communication with suppliers and freight forwarders can significantly reduce transit times. Proactive approaches minimise delays and enhance overall supply chain efficiency.
Leveraging omnichannel strategies: Adopting an omnichannel retail strategy enables SMBs to sell efficiently across multiple channels. Integrated platforms that support omnichannel strategies provide seamless logistics solutions, helping SMBs better position themselves to succeed during peak seasons.
Overcoming supply chain transparency hurdles with technology: Supply chain transparency is essential for managing inventory, meeting customer expectations, and mitigating risks. However, many SMBs struggle with divergent data sources, a lack of data granularity, and partners using outdated methods. Integrating diverse data sources into a single, coherent system addresses these challenges and provides real-time data visibility, helping SMBs make informed decisions and respond swiftly to changes.