We have observed Supply Chains becoming increasingly globalized in an environment of increasing volatility. Over the last decade, we have come across more frequently with the terms “rupture” and “resilience” in Supply Chains, which should imply greater concern with vigilance in maintaining the continuity of operations. In leading companies, the central objective has been to incorporate mechanisms for recognizing and sizing the risks of disruption, and to minimize the gap that results from the companies' ability to respond to overcome them, especially in cases of complex and deep Supply Chains.
The sources of ruptures in the Supply Chain are of different origins, which can come from new technologies capable of transforming operations and the consumer market; of geopolitical context; social responsibility and sustainability; financial and economic; and those related to nature, such as climate change and dramatic events such as earthquakes and tsunamis; among others.
In this sense, leading global companies have increasingly invested in risk management in the Supply Chain to mitigate negative impacts on business and even obtain comparative advantages over the competition.
In recent years, Brazil has leveraged itself due to the growth of international trade, with emphasis on strong increases in demand for commodities that brought concomitant benefits in terms of volume and price. Business “surfed” on the wave of globalization without due recognition of how ephemeral this period of prosperity was. But, as the 2008 financial crisis spread, a new era of readjustment began in the main economies of the Americas, Europe and Asia, characterized by reduced GDP growth, greater protectionism and volatility – economic and financial. Consequently, companies are faced with a more hostile market environment, often accentuated by a lack of preparation to absorb its adverse business impacts.
Currently, we see that the Brazilian situation has been worsening due to the government's persistence in promoting consumption, beyond what is reasonable, in the hope of stimulating the economy. As there was no counterpart investment on the supply side, including infrastructure, also inhibited by serious shortcomings in terms of regulation in key sectors, the business environment ended up becoming even more perverse for companies. Therefore, the picture of recession, inflationary surge and high unemployment that we are now experiencing is a mere consequence of this sad recent history! The lesson to be learned is that most companies were not adequately prepared for this Brazil Risk factor, despite it being recognized today as a precursor to an “announced tragedy”.
The Darwinian maxim holds true that companies with the greatest capacity to adapt to a constantly changing environment are those with the best conditions for survival and evolution in the marketplace!
For companies operating in Brazil, it remains to develop risk management aimed at the resilience of their operations, which must incorporate aspects related to “scalability” and contingency, which include the incorporation of redundancy and flexibility in the Supply Chain. Thus, avoiding supply disruptions, while adapting the product and service portfolio to the demands of a changing market.
This is a relevant subject that is at the top of the agenda of senior company managers, which will be dealt with in the Vertical “Supply Chain in a Crisis Context”, which is part of the program of our XXII International Supply Chain Forum, which will include the participation of an international expert and executives from leading companies. Focus will be given on the presentation of a “framework” that highlights the critical issues of effective risk management, and will feature a panel discussion on initiatives that companies have implemented to build resilience in the Supply Chain.
