Covid-related challenges to plague supply chains in 2021

Organizations can expect regulatory changes, food fraud, and the ongoing effects of Covid-19 to fuel supply chain risks in 2021, according to a report from London-based standards and supply chain intelligence firm BSI.

BSI’s late-April report examines trends and risks likely to impact global supply chains in the year ahead, based on analysis of the firm’s global supply chain intelligence platform. Although the Covid-19 pandemic is easing in many parts of the world, the report reveals that lingering effects from the crisis will continue to pose risks and challenges to companies everywhere.

“Covid-19 will certainly have latent effects on organizational resilience throughout 2021, directly and indirectly shifting the way organizations do business,” Jim Yarbrough, global intelligence program manager at BSI said in a statement. “However, several other challenges, including increased regulation of supply chains and forced labor, are poised to challenge organizational resilience and business continuity as the world continues to grapple with the lingering impacts of the pandemic.”

Legislative measures passed in 2020 will have among the largest effects, particularly those aimed at increasing sustainable sourcing and improving supply chain security. Companies will have to scrutinize the supply chain for susceptibility to labor violations, for example, as a number of governments made a concerted effort to address that issue last year. Sustainable sourcing, deforestation, and cargo and port security are other key issues, according to the report.

Pandemic buying and supply shortages exposed flaws in food supply chains that will continue to be exploited in 2021 as well, especially as those supply chains become more globalized.

“Given the significant level of global food shortages, BSI found that the risk of food fraud is on the rise,” the authors wrote. “Specifically, alcohol and tobacco products saw a global increase in thefts and counterfeiting, given their increasing value and related shortages, as consumption rose while people were in lockdown.”

Food safety also is a concern; the BSI report found that the pandemic affected government capacity to enforce food safety regulations in many areas, meaning that some foods may not have been checked as thoroughly as they should have been.

The report also pointed to a shift in cargo theft patterns over the past year, including more targeting of goods not commonly seen as attractive to thieves—such as personal protective equipment (PPE)—and increased vulnerability of shipments kept in facilities. This led to more thefts involving warehouses and distribution centers, especially in Europe and Africa, according to the report.

The full report is available for download at BSI’s website.