Supply chain crisis prompts platform plan

Swiss Re is set to launch what it described as an “unprecedented” new platform to enable businesses across the world to better tackle supply chain risk.

Speaking in London Ashley Hirst, chief innovation & transformation officer of Swiss Re Corporate Solutions announced that the underwriter was already evaluating the platform with a number of parties with the expectation that it will go live in the fourth quarter of this year.

He said: “It is estimated that over $20 trillion worth are goods and moved across the world each year. The old adage of trying to build an aircraft in the air is what we are witnessing now.

“Challenges have come from a range of different areas.”

He said the current pressure had moved the supply chain from the back office onto the media front pages, and now threatens to redefine the way in which the supply chain has worked for the past three decades with its basis on just in time delivery.

Hirst said the market has seen new cyber risks, enhanced credit risks and the impact of a ship getting stuck in the middle of the Suez Canal, all of which have highlighted the fragility of the supply chain.

It has also become far more complex he explained.

“The supply chain is at a critical junction,” added Hirst. “Decades of evolution has created enormous complexity with many major companies now struggling to know who is in their supply chain.

“Some chains can contain 10,000 companies, and predictions are that 15% to 25% of global exports may shift to different countries in the next three to five years.

“The key issue is how does a company regain control of its supply chain?”

He added: “In the past the supply chain was all about costs, now it is about costs and risk.”

To help combat the threat Swiss Re is to launch a new platform which will allow firms to plot their supply chain and the risks that come with it.

Under the plans firms will be able to access their own information in the platform where it would be confidential but would be “translated” via Swiss Re proprietary system into data that can be sued to map the supply chain and identify the risks and the fragilities. The platform will also look to invite third parties to provide risk analysis information such as systems that will alert companies if there is a likely natural peril event which may impact part of their supply chain.

“At present data is disorganised and dispersed,” added Hirst. “It is difficult to collaborate and load to allow comparison across different categories.

“The Swiss Re Supply Chain Resilience Platform, is unprecedented in the industry.”

“Clients will have their own areas and use our translation pipes to standardise the data. We will invite risk insight producers to add new capabilities, and we hope to have the capability to alerts clients when a risk event happens.

Hirst told Emerging Risks that the plan was to build on the platform’s capabilities and the intention was to add the ability to understand the ESG performance of companies in the supply chain.

“If you continue to manage your supply chain purely in cost you will be left behind when it comes to risk,” he added.

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