The Expert View: Building Robust Supply Chains

Introducing the discussion, Ty Francis, LRN’s Chief Advisory Officer, said his company’s research found many companies lagging when it comes to supply chain due diligence. This at a time when expectations, regulatory, ethical and operational, are only increasing. Supply chains are now a risk surface, an ethical touchpoint, and a critical component of resilience.

 

Rethinking due diligence

Much of the conversation focused on how supply chains are managed in practice. Participants acknowledged that, in many industries, most operations are now outsourced, making it essential to assess not just supplier performance, but also their business continuity planning, sustainability standards and ethical conduct.

 

Ongoing monitoring was considered even more important than initial checks, with participants noting that it is vital to monitor suppliers to ensure you want to continue working with them. Organisations also avoid committing to long-term contracts with new suppliers until they had proven themselves.

 

Contingency planning has become a priority. One business described maintaining an empty warehouse in case an emergency requires rerouting or restocking. Others highlighted the importance of building redundancy into every tier of the supply chain, from transport routes to different distributors.

 

Disruption and diversification

One attendee described the current environment as the most disrupted supply chain market in a generation. Beyond the high-profile shocks of recent years, growing trade tensions, particularly new tariffs, are putting further strain on international operations.

 

For those in highly regulated or restricted sectors, such as defence, diversification is often easier said than done because they have fewer choices when it comes to suppliers.

 

Furthermore, technology hasn’t yet delivered the end-to-end visibility many companies are looking for. Participants said existing tools often cover only part of the supply chain and rarely integrate with one another. Attempts to build unified platforms have struggled because, as one attendee said, “everyone manages supply chains differently. There’s no standard way.”

 

The limits of technology

While emerging technologies continue to be touted as solutions, the group was sceptical of some of the hype. Blockchain, for instance, has long been promoted to secure supply chain data, but none of the attendees use it. Blockchain ensures information can’t be tampered with, but can’t guarantee the information was accurate to begin with, they agreed.

 

AI fared slightly better, with some organisations using it to support due diligence or monitor supplier risk. However, concerns about error rates, data quality and explainability persist. As Mr Francis said: “The challenge with blockchain is the validity of the input and the challenge with AI is the validity of the output.”

 

One attendee said their company uses geospatial intelligence, satellite data and sensors to monitor agriculture and forestry impacts, while others are experimenting with digital twins to model supply chain behaviour. Yet many of these efforts remain in early stages. “Traceability is ultimately a human problem,” one executive noted. “It still requires site visits and real people making evaluations.”

 

Ethics, leverage and local realities

The ethical dimension of supply chains drew strong reactions. Several organisations noted they have little leverage when dealing with significantly larger suppliers, especially when those suppliers insist their own codes of conduct take precedence. “You can’t always impose your ethical framework,” said one participant.

 

Others spoke candidly about the difficult trade-offs required in some markets. In certain regions, all available distributors might carry red flags, forcing companies to choose between doing business under less-than-ideal conditions or exiting the market altogether. Understanding the local cultural context was seen as critical. “Ethics are rooted in culture,” one participant said. “But culture differs across countries. You must understand the culture”

 

Even so, participants agreed companies must be able to demonstrate reasonable steps to assess the ethics of their suppliers. But this comes at a cost. “Compliance raises expenses,” said one attendee. “So, every business has to make a judgement call about how much to invest in reducing risk.”

 

Data, cloud and digital exposure

Data handling emerged as another growing area of concern. Delegates pointed to increasing regulatory restrictions on cross-border data transfer, particularly when suppliers are using cloud services or AI. Knowing who processes data and how is an essential part of modern due diligence.

 

There was also a broader question about digital resilience. “Your treasury department doesn’t just use one bank,” noted one executive. “So why are we relying on a single cloud provider for critical services?” Others were less certain, saying cloud suppliers generally have such an important role that they are effectively ‘too big to fail’.

 

As the evening ended, Mr Francis emphasised that monitoring suppliers is no longer enough. “You can’t just monitor them,” he said. “You have to educate them.”

 

Training programmes for vendors are still relatively rare - just one attendee said their company does it - but that will change, said Mr Francis. As more companies look to embed ethics and compliance deeper into their supply chains, supplier education is set to become a key area of investment. Businesses that take the lead will not only strengthen their own operations but raise the bar for entire industries.

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