4 steps to building supply chain resiliency and protecting your business

Supply chains are the lifeline of the world economy—delivering the goods we rely on from food to electronics—and right now those global networks are more unstable than ever. 

It’s a top priority for many: Supply chain issues ranked as the 2nd biggest challenge overall for medium-sized enterprises in BDO’s Midmarket Outlook Report

Learn from experts in the field about the biggest issues facing supply chains today and best practices for managing risks and building resiliency.

"Knowledge is power and you can use that to cushion your business from unforeseen costs."

 – Charmaine Goddeeris | Senior Manager, Indirect Tax, BDO Canada

How did we get here?

Here are some of the compounding factors that have led us to the current unstable situation, and predictions for disruptions in 2022 and beyond:

“Buy American” trade dispute
The U.S. imposed tariffs on steel and aluminum imports. Canada imposed retaliatory tariffs on a number of consumer goods

COVID-19
Ongoing labour shortage issues due to vaccination status, employees getting sick, and strikes

Suez Canal obstruction
A ship became stuck in the Suez Canal for six days, blocking access

Rising cost of transportation

Situation in Ukraine

Ongoing disputes over USMCA

Vaccination policy for the trucking industry

Microchip
shortage

Implementation of USMCA
New product qualification requirements 

"The supply chain is really not a chain, it’s a network of many companies working together to provide the products and services you buy.”

– M. Johnny Rungtusanatham | Canada Research Chair in Supply Chain Management, Schulich School of Business

Key steps to building a resilient supply chain

Unfortunately, it’s impossible to eliminate all risk when it comes to supply chain disruptions. However, there are a few key steps you can take to mitigate those risks and protect against losses.

Step 1: Conduct an in-depth risk assessment

"Risk management is now a science. There are tricks, prototypes, and templates for managing risk from analysis all the way to mitigation."

– Patrick Etokudo | General Manager,
Operations Services, Sherritt International Corporation

  • Visualize and map out your entire global supply chain from end to end
  • Conduct systematic risk assessment of every sub-process in your
    supply chain
  • Understand the current and possible international trade disputes that could cause additional duty costs and disruptions and have a back-up plan
  • Gather historical data on previous supply disruptions to your business and similar businesses
  • After your risk assessment, you should have a clear understanding of the top risk events that could impact your supply chain and which risk treatment options are best (e.g. whether you will accept, transfer, or avoid the risk)

Step 2: Invest in digital transformation

  • Update and take advantage of the technology available today. Are there investments you can make in detection capabilities?
  • Leverage AI and predictive analytics. Increased accuracy and agility can be achieved through enhanced forecasting models that incorporate market and consumer trends, and external market forces
  • Manage your cyber risks. Prior to implementing new systems, test their resiliency  to security threats. Be prepared for an increased risk of cyber incidents due to employees working from home

Step 3: Enhance supply chain competency within your organization

“Like with any important initiative in your organization, the tone needs to come from the top. Leaders need to communicate that supply chain risk management is a priority and ensure sufficient resources are invested.”

– Josiane Simon | VP, Risk Advisory Services, BDO Canada

  • Employ supply chain professionals who have business acumen, political savvy, and are technologically literate
  • Stay on top of current events including, international trade disputes and political unrest
  • Avoid a siloed approach. Risk is complex and you need to have alignment with all areas of the business including strategy, operations, tax, and finance functions
  • Identify an emergency response coordinator who is responsible for taking command during a crisis—allowing you to mobilize resources and respond quickly

Step 4: Diversify and strengthen your supply chain

  • Diversify your suppliers. By geographically diversifying your suppliers you can evade the impacts of a disruption in one region. It can also improve your agility, cut costs, and allow you to offer more competitive prices
  • Consider near or domestic shoring. You can reduce costs by avoiding international trade disputes, shortening transportation routes, and reducing complexity. However, labour costs will likely be higher, so be sure to do a cost benefit  analysis
  • Develop stronger relationships with your suppliers. Maintaining ongoing discussions with suppliers ensures that your company is top-of-mind during a disruption
  • Vet your suppliers. Find out how they are vulnerable to disruptions and consider asking for an independent audit report for added assurance
  • Take advantage of Canada’s 14 trade agreements that allow duty free entry of qualifying goods into the country

“The issue with pushing a ‘buy Canadian’ or ‘buy American’ agenda is that our supply chains are already integrated, and it can become problematic. We can look into domestic shoring, but we have to do it in conjunction with our trade partners.”

– Matt Poirier | Director, Trade Policy, Canadian Manufacturers & Exporters (CME)

BDO can help

BDO’s team of experts can help you enhance your company’s ability to identify, prepare for, and respond to supply chain challenges.

Connect with a BDO advisor today

Josiane Simon

Vice President, Risk Advisory Services
BDO Canada
514-931-0841 | josimon@bdo.ca

Charmaine Goddeeris

Senior Manager, Indirect Tax
BDO Canada
905-946-1066 | cgoddeeris@bdo.ca

4 steps to building supply chain resiliency and protecting your business

“Buy
American” trade dispute
The U.S. imposed tariffs on steel and aluminum imports. Canada imposed retaliatory tariffs on a number of consumer goods

“Like with any important initiative in your organization, the tone needs to come from the top. Leaders need to communicate that supply chain risk management is a priority and ensure sufficient resources are invested.”

"Risk management is now a science. There are tricks, prototypes, and templates for managing risk from analysis all the way to mitigation."

– Josiane Simon | VP, Risk Advisory Services, BDO Canada

COVID-19
Ongoing labour shortage issues due to vaccination status, employees getting sick, and strikes

– Patrick Etokudo | General Manager,
Operations Services, Sherritt International Corporation

Suez Canal obstruction
A ship became stuck in the Suez Canal for six days, blocking access

Supply chains are the lifeline of the world economy—delivering the goods we rely on from food to electronics—and right now those global networks are more unstable than ever. 

It’s a top priority for many: Supply chain issues ranked as the 2nd biggest challenge overall for medium-sized enterprises in BDO’s Midmarket Outlook Report

Learn from experts in the field about the biggest issues facing supply chains today and best practices for managing risks and building resiliency.

Rising cost of transportation

Situation in Ukraine

Ongoing disputes over USMCA

Vaccination policy for the trucking industry

How did we get here?

Here are some of the compounding factors that have led us to the current unstable situation, and predictions for disruptions in 2022 and beyond:

Microchip
shortage

Implementation of USMCA
New product qualification requirements 

"The supply chain is really not a chain, it’s a network of many companies working together to provide the products and services you buy.”

– M. Johnny Rungtusanatham | Canada Research Chair in Supply Chain Management, Schulich School of Business

Key steps to building a resilient supply chain

Unfortunately, it’s impossible to eliminate all risk when it comes to supply chain disruptions. However, there are a few key steps you can take to mitigate those risks and protect against losses.

Step 1: Conduct an in-depth risk assessment

  • Visualize and map out your entire global supply chain from end to end
  • Conduct systematic risk assessment of every sub-process in your
    supply chain
  • Understand the current and possible international trade disputes that could cause additional duty costs and disruptions and have a back-up plan
  • Gather historical data on previous supply disruptions to your business and similar businesses
  • After your risk assessment, you should have a clear understanding of the top risk events that could impact your supply chain and which risk treatment options are best (e.g. whether you will accept, transfer, or avoid the risk)

Step 2: Invest in digital transformation

  • Update and take advantage of the technology available today. Are there investments you can make in detection capabilities?
  • Leverage AI and predictive analytics. Increased accuracy and agility can be achieved through enhanced forecasting models that incorporate market and consumer trends, and external market forces
  • Manage your cyber risks. Prior to implementing new systems, test their resiliency  to security threats. Be prepared for an increased risk of cyber incidents due to employees working from home

Step 3: Enhance supply chain competency within your organization

  • Employ supply chain professionals who have business acumen, political savvy, and are technologically literate
  • Stay on top of current events including, international trade disputes and political unrest
  • Avoid a siloed approach. Risk is complex and you need to have alignment with all areas of the business including strategy, operations, tax, and finance functions
  • Identify an emergency response coordinator who is responsible for taking command during a crisis—allowing you to mobilize resources and respond quickly

Step 4: Diversify and strengthen your supply chain

  • Diversify your suppliers. By geographically diversifying your suppliers you can evade the impacts of a disruption in one region. It can also improve your agility, cut costs, and allow you to offer more competitive prices
  • Consider near or domestic shoring. You can reduce costs by avoiding international trade disputes, shortening transportation routes, and reducing complexity. However, labour costs will likely be higher, so be sure to do a cost benefit  analysis
  • Develop stronger relationships with your suppliers. Maintaining ongoing discussions with suppliers ensures that your company is top-of-mind during a disruption
  • Vet your suppliers. Find out how they are vulnerable to disruptions and consider asking for an independent audit report for added assurance
  • Take advantage of Canada’s 14 trade agreements that allow duty free entry of qualifying goods into the country

“The issue with pushing a ‘buy Canadian’ or ‘buy American’ agenda is that our supply chains are already integrated, and it can become problematic. We can look into domestic shoring, but we have to do it in conjunction with our trade partners.”

– Matt Poirier | Director, Trade Policy, Canadian Manufacturers & Exporters (CME)

BDO can help

BDO’s team of experts can help you enhance your company’s ability to identify, prepare for, and respond to supply chain challenges.

Connect with a BDO advisor today

Josiane Simon
Vice President, Risk Advisory Services
BDO Canada
514-931-0841
josimon@bdo.ca

Charmaine Goddeeris
Senior Manager, Indirect Tax
BDO Canada
905-946-1066 cgoddeeris@bdo.ca

"Knowledge is power and you can use that to cushion your business from unforeseen costs."

 – Charmaine Goddeeris | Senior Manager, Indirect Tax, BDO Canada

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