Why supply chain resilience matters and how to build it

07/01/26 Wavenet
Why supply chain resilience matters and how to build it placeholder thumbnail

This article explores the rising regulatory focus on supply chain resilience, the importance of having strong contingency strategies, and gives you clear practical steps you can take to identify and manage high-risk suppliers.

Organisations are increasingly relying on complex supply chains to deliver services efficiently and cost-effectively. Some industry sectors such as retail, automotive, healthcare to name just a few, are built on their supply chains and many organisations across all sectors, are choosing to outsource functions and services to streamline operations and focus on their core capabilities.

In both scenarios, the added exposure to third-party risks needs to be identified and managed. When critical functions are managed externally, it becomes more challenging to ensure they are delivered efficiently, and in a resilient manner that protects your business.

The key question is: how confident are you, that your supply chain relationships can support your business without disruption?

Why supply chain resilience is gaining regulatory attention

Regulatory bodies are increasingly scrutinising supply chain risk. Factors driving this focus include evermore complex interconnected networks, an increase in customer expectations in terms of increased flexibility and shorter timescales, and an upsurge in wider and global on and off-line disruptions. Businesses are still ultimately accountable for the performance and security of the services delivered by third parties. While outsourcing can help reduce internal workloads and operational costs, responsibility for risk mitigation stays firmly in-house.

As supply chains become more layered, it’s vital to have a clear process for evaluating and managing third-party dependencies, especially as these suppliers face their own set of vulnerabilities.

What supply chain resilience means

Definition
Supply chain resilience is your organisation’s ability to absorb shocks, respond quickly, and maintain continuity when disruption hits.

What it involves
It’s about predicting potential issues, adapting in real time, and bouncing back fast when the unexpected happens.

Why it matters
Resilient supply chains reduce lost revenue, limit operational costs, support customer retention, and protect brand trust.

Why supply chain resilience has become business critical

  • Constant disruption
    Events like COVID-19, extreme weather, and political tensions have exposed the fragility of global supply chains. Resilience is not a “nice to have”, it’s an organisational necessity.
  • Operational advantage
    Firms that maintain flow during disruption can gain market share and outperform slower-moving rivals.
  • Long-term cost savings
    Minimising downtime and avoiding last-minute fixes reduces long-term costs, even if it means higher up-front investment.
  • Customer expectations
    Customers expect consistency. Reliable delivery strengthens loyalty and increases repeat business, and your ability to continue to deliver even in tough conditions, can set you apart from your competitors, win over new business and increase your market share.

What you can do to deliver supply chain resilience in practice:

We recommend that you follow this comprehensive 8-point checklist as a journey – it’s not intended to be a one-off tick-box exercise:

1. Supplier diversification

Work with multiple suppliers across different geographies to reduce exposure to any single failure point. This includes developing relationships with one or more backup suppliers of critical services, so that you have  pre-vetted alternative providers ready to step in at short notice to reduce exposure if your primary provider encounters problems.

2. End-to-end visibility

Track activity across your full supply chain, including second- and third-tier suppliers, to spot risks early.

3. Pinpoint weak spots

Audit your supply chain to flag risks, like sole-source suppliers, congested ports, or fragile IT systems. Then take action to address these! It’s also wise to evaluate each of your key suppliers’ own resilience, not just in relation to your needs. You need to know that they have a resilience approach and do not have inherent risks that are harder to relate directly to services they deliver to you. 

Do they have contingency plans in place internally? Can they continue their business operations during a crisis? By aligning your own business continuity planning with those of your key suppliers, you build a stronger, more adaptive supply chain.

4. Operational agility

Make sure you can move quickly to switch suppliers, reroute shipments, or shift production when conditions change. Prioritising agility over cost-savings in your supply chain to maintain continuity of your operations, is key.

5. Strong partnerships

Build trust and alignment with suppliers and logistics partners. Open lines of communication make response faster and more effective. Specifically, share data, discuss risk mitigation, and build shared contingency plans.

6. Smart tech upgrades

Adopt tools that give you real-time data, automate processes, and improve communication across your network., for example AI, automation, machine learning, blockchain, and digital twins to improve your forecasting, speed up decisions, and gain insight into supply chain dynamics.

7. Scenario planning

Develop detailed response plans for likely disruptions. Develop fallback strategies with alternative suppliers, routes, production lines. Then test and update them regularly.

8. Measure and refine

Track the performance of your resilience efforts. Adapt your strategy based on what works, what doesn’t as well as what changes. Get expert support from resilience and business continuity providers.

Staying ahead in a complex supply chain landscape

As global supply chains grow more complex, the risks associated with third-party dependencies increase in parallel. With regulators demanding greater transparency and control, businesses must take proactive steps to shore up resilience.

By identifying high-risk suppliers, embedding resilience into supplier management processes, and maintaining open lines of communication, organisations can reduce the impact of potential disruptions. Effective supplier risk management isn’t just good governance; it’s a strategic priority for long-term business continuity.

Support to strengthen your supply chain

Creating and maintaining a resilient supply chain can be a challenge, but you don’t have to face it alone.

Our team can help you conduct a comprehensive business impact analysis, mapping your key suppliers and assessing the criticality of their services. Using our powerful Shadow-Planner platform, we can automate this process or guide you through it manually, whichever suits your environment.

Take a proactive next step towards better supply chain resilience

As part of our managed services offering, we carry out third-party supplier Business Continuity Management (BCM) assessments. This gives you assurance that your external partners are prepared for disruptions — so their disruptions won’t become yours!

blogs, business continuity

Latest blogs

See all posts
Placeholder thumbnail
4 critical strategies for ensuring business continuity in the manufacturing industry

The manufacturing industry is currently undergoing a significant transformation with the advent of Industry 4.0. In order to optimise this transformation, manufacturers must prioritise operational resilience. Safeguarding production output and mitigating risks arising from cybercrime and supply chain disruptions are paramount. In today’s environment, manufacturers frequently encounter disruptions within their supply chains. It’s essential to have a robust business continuity and disaster recovery plan for addressing critical events and ensuring uninterrupted product delivery to customers. Considering these challenges, let’s explore some of the key strategies that manufacturers should adopt to secure their long-term success, even in the face of business-impacting events. 1. Assess the risks your business may encounter To begin, identify the critical aspects of your business, their dependencies, and how long you can operate without them. Understand the recovery capabilities of these dependencies to spot potential risks to your business and its recovery. Conducting a thorough Business Impact Analysis (BIA) will help uncover this valuable information. In manufacturing, typical disruptions include hardware and software issues, power failures, cybercrime, human error, natural disasters, and fires. Performing a BIA can be labour-intensive and time-consuming, but it swiftly reveals operational risks that might otherwise remain hidden until an incident occurs. While conducting a BIA internally is an option if you have the necessary resources, many businesses choose to outsource this task to external experts. Wavenet is here if you need us. 2. Establish your business-critical resources Manufacturers rely on vital assets, including office buildings, warehouses, production lines, and transportation hubs. These assets face many threats and disruptions. Therefore, your business continuity and disaster recovery team should work with senior leadership to identify the most important resources. Creating a simple list of these business-critical assets, without the need for extensive documentation, will suffice. Use that list to prioritise which function must be restored first to protect those assets. Whether it’s equipment, IT systems, or production lines, focus on what matters most. Then develop targeted comprehensive business continuity and disaster recovery plans around those priorities. 3. Develop your business continuity and disaster recovery plans Now it’s time to construct your business continuity, crisis management, and disaster recovery plans. It is crucial to understand the distinctions between these plans and how they can complement one another. A crisis management plan enables your business to respond swiftly and in an organised manner to unforeseen or sudden incidents. It includes vital information regarding communication protocols with staff and key stakeholders, escalation and de-escalation procedures, as well as immediate actions to be taken. On the other hand, a business continuity plan outlines the steps necessary to recover and resume critical operations at a predefined level after any disruption that affects the business’s functioning, regardless of its duration. A disaster recovery plan primarily focuses on restoring the business’s critical technology infrastructure. It also encompasses procedures for managing the recovery of IT and communication services to support the business after a service disruption. If needed, a crisis management plan can be integrated into the broader business continuity plan. Top tip – prioritise smart planning over excessive planning! Throughout our experience, we have observed numerous organisations attempting to prepare for every conceivable situation. However, the truth is that it’s impossible to anticipate every single thing that “might” happen. Therefore, it is crucial not to burden yourself with that expectation. A successful plan isn’t one that dictates actions for specific scenarios, but one that empowers you to make well-informed decisions in any situation. A useful plan is one that is actually utilised because it provides assistance. When creating your plan(s), consider what essential information is necessary for guiding your decision-making process. Anything beyond that is likely unnecessary, as it only complicates the plan and renders it impractical. If you find it necessary to have a plan tailored to a specific scenario, ensure that it focuses solely on that particular situation. Most importantly, make sure that everyone understands the purpose of the plan. 4. Harness external resources No business is impervious to cyber threats, operational risks, and the unpredictable nature of life! When faced with adversity, having a well-tested business continuity plan and reliable business continuity services can make a substantial difference for manufacturers. At Wavenet, we excel in both of these areas, and we are here to offer our assistance. Given the intricate nature of business continuity and operational resilience, it is understandable that many companies seek outsourced solutions. This approach ensures that you benefit from the expertise of professionals experienced in crafting comprehensive business continuity plans. It also grants you access to cutting-edge solutions based on industry best practices. Our team of BCM/OR consultants is equipped to oversee your entire business continuity management program, relieving you of the challenges associated with in-house management. Our ultimate goal is to help manufacturers optimise efficiency, streamline costs, and address present and future industry challenges, while safeguarding customers and infrastructure in today’s ever-expanding online marketplace.

Read more
Placeholder thumbnail
The advantage of business continuity for retailers

However, with evolving consumer behaviours, the rise of round-the-clock shopping, and the continuous advancements in online and mobile technologies, data analytics, and business intelligence tools, the need for effective business continuity management has become a paramount concern. It is now essential for retailers to protect their technology investments and maintain a competitive edge. Alongside the need to “keep the lights on.” Here are some of the key benefits that business continuity brings to retailers like yourself: Safeguards your valuable data In the retail industry, data plays a crucial role. It provides valuable insights that drive sales, enhance the customer experience, and optimise various aspects of operations such as inventory management and waste reduction. Any downtime or data loss can have a significant impact on the success and continuity of your business. As the prevalence of cyber threats continues to grow, investing in disaster recovery services and business continuity has become imperative for retailers. The costs associated with dealing with breaches or outages far outweigh the investment in proactive measures. By implementing strategies like real-time system mirroring and immutable backups, you can ensure the protection of your critical systems. In the event of a disruption, these measures enable quick recovery in a secure and dedicated location, minimising downtime and ensuring the integrity of your data. Immutable backups provide additional protection against not only traditional risks like equipment failures or environmental issues but also against evolving cyber threats such as ransomware. By storing backups offsite and in an air-gapped environment, they offer an extra layer of security that cannot be tampered with. Protects your brand reputation Consumer trust is the holy grail of a retailers success. Consumers buy into a brand rather than individual retail channels, and despite difficult economic times, trusted retail brands have increased their profitability and fostered their marketing position. But what would happen if that trust was breached? When customers lose trust in a retailer, they start to look elsewhere, which usually leads them to a rival business who has not just suffered a cyber attack. And it doesn’t stop there, these consumers then go on to tell others about their experience, complain via social media channels and leave negative reviews on platforms such as TrustPilot. It is evident that losing data and trust go hand in hand. It’s essential that you have an effective data protection strategy in place as well as a disaster recovery plan to mitigate risks. It is also just as important to have a robust crisis communications plan – having a plan in place that outlines proper communications with your customers leads to increased transparency and trust. Safeguards your supply chain Inevitably, disruptions will arise—it’s not a matter of if, but when. Establishing documented contingency plans to ensure the uninterrupted delivery of your products and services during these disruptions is crucial for the ongoing prosperity of your business, especially during critical retail periods such as Black Friday, Christmas, or the summer season. Any disruption occurring during these peak trading periods could have catastrophic consequences. Effectively managing supply chain risks is a fundamental aspect for retailers and can not only safeguard your operations when issues arise but also give you a competitive advantage over rivals who may not be as well-prepared. By proactively addressing potential disruptions and implementing strategies to mitigate their impact, you can demonstrate resilience and reliability to customers, setting yourself apart in the marketplace. Mitigate financial risks According to recent data from IBM, in 2022, the average time to identify and contain a data breach in the retail sector was 287 days. The longer it took to detect and resolve the breach, the higher the associated costs. In terms of financial impact, the average cost of a data breach for retailers was £2.68 million in 2022, a significant increase from £1.64 million in 2020. Furthermore, the study highlights the importance of having robust business continuity plans in place. Organisations that had effective business continuity planning and tested disaster recovery plans experienced an average total cost of a data breach that was £2.01 million lower than those without such preparations. This demonstrates the clear correlation between prioritising business continuity planning and reducing financial risks associated with data breaches. These statistics underscore the need for retailers to invest in comprehensive security measures and prioritise business continuity planning to safeguard their operations, protect customer data, and mitigate the potential financial consequences of a data breach. What should I do next? Wondering what your next steps should be? The concept of business continuity management (BCM) has gained even more significance in recent years, prompting retailers of all sizes to re-evaluate its importance. The consequences of not having a BCM plan in place can be severe and debilitating. It’s easy to get overwhelmed by competing demands from various departments, management, and IT, resulting in confusion, delays, and potential damage to reputation. If BCM is a top priority for you but you are unsure where to begin, we recommend checking out our advisory article “5 top tips for successful business continuity planning”. The next crucial decision revolves around whether to handle BCM internally or outsource it to a specialised third party. Both options have their pros and cons. To gain a deeper understanding of this topic, you can read more on that in our insightful article – “Business Continuity Management (BCM) – are you going out or staying in?” We hope these resources prove helpful to you. However, it’s worth noting that we are also the industry leader for business continuity and operational resilience in the UK. Whether you choose to outsource BCM or manage it in-house, we offer award-winning services and support to assist you along the way.

Read more
Placeholder thumbnail
Resilience checklist for healthcare providers

Your practical guide to identifying gaps and strengthening business continuity across your healthcare organisation.

Read more
Placeholder thumbnail
Resilience checklist for manufacturers

Your practical guide to identifying gaps and strengthening business continuity across your manufacturing organisation.

Read more
Placeholder thumbnail
5 essential tips for effective business continuity planning

1. Business continuity planning: think smart, not big! Throughout my experience, I’ve witnessed countless organisations attempting to plan for every imaginable situation. However, it’s important to acknowledge that it’s simply not feasible to anticipate every single eventuality. Instead of striving for an all-encompassing plan, focus on creating a plan that empowers you to make well-informed decisions in any given scenario. A good plan is one that is practical and useful, providing essential information that aids decision-making. Avoid including unnecessary details that only make the plan cumbersome and impractical. If you find the need for a specific scenario-based plan, ensure it is laser-focused on that particular situation. Most importantly, ensure that everyone comprehends its purpose. 2. Safeguard your business: understand what is important and why In my view, it’s crucial to have a clear understanding of what is truly critical in your business and the dependencies associated with those critical elements. Without this understanding, how can you effectively safeguard your business? You may find yourself dedicating efforts to the wrong areas or unintentionally overlooking dependencies that could have a significant impact. Conducting a Business Impact Analysis (BIA) may require considerable effort and time, but it serves as a valuable shortcut for identifying operational risks that may not surface until an actual incident occurs. It’s of utmost importance that anyone involved in business continuity or operational resilience comprehends the significance of these efforts and fully buys into their purpose. 3. Thriving operational resilience: board engagement is key Throughout my experience, I have encountered the repeated notion that securing management buy-in is indispensable for a thriving resilience program, and I wholeheartedly agree. Without the endorsement of management, how can we anticipate the rest of the staff to actively participate? It is crucial for employees to recognise that the resilience program is backed and mandated by the board. It is not an optional endeavour but a necessary one in order to safeguard the business. Over time, it becomes ingrained in the culture of the organisation, shaping the way we operate and protect our interests. 4. Incident response plans: you are only as good as your last test! I firmly believe in the adage “you are only as good as your last test.” It doesn’t matter how impressive your plans may be if you’ve never put them to the test. How can you be certain they will actually work? Furthermore, how can you ensure that your staff knows their roles and responsibilities during an incident? Do they understand the procedures they need to follow? Testing is an invaluable practice that fosters inclusivity and helps individuals grasp their responsibilities in an emergency. It not only boosts their confidence in meeting expectations, but also allows them to practice their response in a controlled environment, free from the fear of making mistakes. Remember, it’s far better to discover any flaws or missing critical data during an exercise than during a real incident when you’re relying on it. Testing is the key to building resilience and ensuring readiness when it matters most. 5. Include suppliers in your business continuity planning I want to emphasise the significant role that suppliers play in our success. They often provide crucial services and data that are vital to our operations. It’s important to treat them as an extension of our own business or as an additional department. Taking the time to understand them in detail is essential. Including them in our business continuity planning and testing processes is a crucial step towards building a resilient relationship. It ensures that both parties understand the significance of what they provide to us. Equally important is gaining insight into their resilience capabilities and how they would continue to deliver their services in the event of an incident. By involving them in our program and taking the opportunity to develop a deeper understanding, we can foster a stronger and more resilient partnership. About the author Colin Jeffs MBCI moved into the realm of business continuity from IT project management where, as part of implementing IT systems, he had to implement resiliency. Colin has worked in business continuity/operational resilience and crisis management for more than 28 years, holding senior roles in these disciplines for many years at major financial institutions in the city of London. Colin now heads up Wavenet’s award-winning operational resilience consulting and software division.

Read more
Placeholder thumbnail
Retail resilience checklist

Your practical guide to identifying continuity gaps and building operational resilience across your business.

Read more