A New Standard Chartered survey found that ASEAN companies believe that financial stability of indirect suppliers are important in supply chain robustness.
Called “Critical Indicators of Sustainable Supply Chain”, it showed that 90% of surveyed companies agree that certain factors are able to reflect effectiveness of supply chain: environmental soundness and transparency of direct suppliers; financial stability; flexibility and adaptability; and collaboration and connectedness across the ecosystem.
ASEAN firms value ensuring the financial stability of indirect suppliers. They do this by creating finance options independent of supplier finance programmes. While almost 60% of companies in the region find this important (52% globally), only 42% of those in the economic bloc rate believe they are performing well in this area.
As Covid-19 still affects global supply chains, companies have recognised the need to implement a holistic approach to supply chain management. The survey reflected this as 60% of ASEAN companies saw “understanding and monitoring the labour practices of direct suppliers” as essential to forming environmentally sound and transparent supply chains. However, only 38% believed they are doing well in this area.
To establish flexible and adaptable supply chains, 57% of ASEAN companies believe that “fully prepared and tested business continuity plans” and “reviews of supplier relationships, production facilities, logistic route and other key supply chain challenges…from the Covid-19 pandemic” are key. While 55% believed they performed well in having business continuity plans, just 42% believe the same in reviewing suppliers.
Finally, 65% of ASEAN companies see “developing shared objectives/KPIs between internal departments within the firm” a top priority in building collaborative and connected supply chains, but less than half believe they performed well.
