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For the past two years, the COVID-19 pandemic has continued to disrupt supply chains around the world, reaching nearly every industry. With the recent Russian invasion of Ukraine, these supply chain problems have become increasingly more complex and are expected to take even longer to improve. In addition to the challenges presented by COVID-19, the Russian invasion has presented new disruptions to supply chains. The most severe vulnerability is the United States’ heavy reliance on Russia’s supply of natural gas and crude oil. In addition, both Russia and Ukraine provide the global market with key agricultural goods. In fact, according to the Food and Agriculture Organizations of the United Nations, Russia and Ukraine account for more than 25 percent of the world’s trade in wheat and 60 percent of global sun flower oil. Russia is also a major exporter of fertilizers and critical minerals. While these supply chain issues may seem unrelated to many businesses and organizations, the interconnectedness of economies is likely to cause supply chain disruptions that could take years to improve. As solutions are being developed to correct supply chain problems, there are some key improvements organizations can implement now in order to manage their own risks.

  • Review risk management structures. Conduct a risk assessment around which supply chain disruptions are most likely to cause issues within your organization. This includes focusing risks to key commodities that are likely to influence or agitate your business practices. During the COVID-19 pandemic, many organizations failed to implement proper risk management tools. Risk management experts suggest creating, reviewing and implementing these processes sooner rather than later.
  • Understand supply sources. Because supply chain systems are thought to be disrupted for the long-term, it’s important to look for alternate sources of supply. This could include identifying secondary sources to secure commodities necessary for your business. It’s also crucial for organizations to understand the impact of inflation and find ways to drive down costs to reflect these changes.
  • Monitor and review logistics. Just as we witnessed during the height of the COVID-19 pandemic, many organizations are facing logistical disruptions. These include container shortages, long lead times, increased freight rates and transport congestion. Instead of improving, these problems have been made more complex with Russia’s invasion. In addition to rising oil prices, many freights and flights are being rerouted, causing longer wait times. Companies should continue to monitor these changes and exercise flexibility when it comes to logistics.
  • Increase cybersecurity measures. Many of the world’s supply chains are now digital, which helps decrease traditional supply chain issues but also increases the risk of cyberattacks. Organizations should reinforce their cybersecurity measures and be aware of organized attacks that could put sensitive information at risk in the hands of bad actors.
  • Plan your response. As supply chain disruptions continue, it’s important for organizations to review any implications affecting employees and contractual staff. Creating open channels of communication will allow leaders to engage with employees and vice versa. Because supply chains are being severely impacted by labor shortages, it’s crucial that organizations work to retain their staff with incentives and prime working conditions.     

Successful organizations will take steps to prevent supply chain disruptions from impacting their efficiency and productivity. In addition, leaders of these organizations should understand the longevity of these supply chain issues and implement processes that reflect these changes. Risk management teams around the world are working with organizations to help protect their employees and mitigate risk as supply chains continue to be affected by critical global events and crises. 

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