Supply chain resilience in Europe
As businesses across the world continue to face the extraordinary challenges brought about by COVID-19 and the global economy remains largely on lockdown, the sudden shock to supply chains has forced businesses in Europe to consider how they can adapt their supply chains to ensure they can endure future disruption.
As well as presenting unique challenges of its own, the pandemic has accelerated existing concerns relating to the supply chain following political events such as Brexit in recent years. When it comes to the supply chain, there are two primary concerns for businesses in Europe right now: COVID-19 and protectionism.
Europe is heavily dependent on international supply networks in many industries, from pharmaceuticals to automotive and electronics, and the COVID-19 pandemic has presented an enormous threat to extended supply chains; forcing businesses across all sectors to look at their supply chains in a way that they have not done in a long time. The pandemic has led to colossal supply chain interruption – especially to hygiene and medical supplies such as PPE, ventilators and hand sanitiser – and the double blow of hugely increased demand and thin stockholding is not something that will be forgotten in a hurry.
The orthodoxy of supply chains has been challenged by the pandemic. Prior to COVID-19, many businesses across Europe had an ‘out of sight, out of mind’ approach to their supply chains and those businesses have really been hit by the pandemic. As well as having an immediate impact, COVID-19 has resulted in businesses taking a more holistic and long-term approach when considering what is important in the supply chain. Following COVID-19, the most important consideration for business is ensuring their supply chain is robust and resilient. The previous focus on "just in time" is giving way to more focus on "just in case".
Right now, businesses in across the globe need to take a hard look at the way they conduct their supply chains and ask themselves:
- How robust is our supply chain?
- What are the worst-case scenarios that I need to cater for?
- Can we source from alternative suppliers in the event of a natural disaster or a global pandemic interrupting our supply?
Just a few years ago, protectionism may not have been a cause for concern for extended supply chains, however, in the last couple of years following the Brexit referendum, it appears to be more of a worry for European businesses especially, and it could become a genuine threat to supply. We are already seeing a much greater focus on contractualising supply chains, with more sanctions and tariffs in place and, although Brexit is a big part of that, it’s not the only factor leading to businesses being more critical of supply operations.
While the populist political climate continues, protectionism in a trade sense is likely to continue too. Businesses must adapt their contractual and relationship structures within supply chains to manage existing or potential future protectionist measures. Using Brexit as an example, there’s also the impact on the countries businesses are trading with; some businesses will have acknowledged that those barriers are there to stay and will have already adjusted their supply chain accordingly, looking towards using UK and other non-EU suppliers rather than continuing to use European ones.
Supply chain resilience is a fundamental consideration for businesses in the current climate. Increasing supply chain resilience does potentially come with increased cost and so suppliers and purchasers will need to decide who bears this and whether it is viable to pass it through to consumers. A key way to reduce international risk is to diversify and bring supply chains closer to home, although businesses need to acknowledge that as well as being more costly, it will be more complicated to manage.
One benefit that has arisen from the world being sent into lockdown is the positive impact slower living has had on the environment, and – as we approach the other side of this –businesses need to be aware consumers may place even more importance on sustainability than they did prior to the pandemic.
While the global economy is somewhat on hold, businesses must face the challenge of thinking more holistically about their supply chains and make these crucial adaptions while they can. Though challenging, businesses must consider bringing their supply chains closer to home to protect themselves from the threats presented by protectionism and by COVID-19, while futureproofing their supply chains against future interruptions and becoming more sustainable and resilient.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.