Can Philanthropy Boost Supply Chain Resiliency In The Pandemic + Beyond?

Shocks like COVID-19 test the strength of supply chains around the world. Here’s why company investment in community development builds supply chain resiliency.


 

Resiliency is a word increasingly used in the corporate social responsibility (CSR) space, often in the context of a corporation’s need to prepare for unexpected risk and their ability to recover quickly from disruption. Though it is not a new concept, awareness and examples of how social and environmental issues can significantly impact a company’s operations are on the rise. This is largely the reason that CSR has become more strategic. Business decisions that have positive impacts on employees, customers, the environment, and local communities are, more often than not, smart business choices.

Meanwhile, the globalization of business has raised the stakes and compounded the risks that challenge a company’s resiliency. Today’s businesses rely on complex supply chains that are vulnerable to everything from adverse weather conditions to geopolitical crises. In 2011, the magnitude 9.0 earthquake and subsequent tsunami that hit northeastern Japan disrupted global supply chains for weeks, and the 2019 US-China trade wars continue to challenge the manufacturing, agricultural, and lately, technology sectors. Corporations must assess all potential risks early and often in order to prepare for and rebound from likely disruptions.

While much of supply chain resiliency efforts focus on the processes, regulations, and technologies they have come to depend on, they should not ignore the millions of individuals who uphold these complex systems across the entire value chain. This has never been more evident than with the global COVID-19 pandemic, which demonstrated the need for companies to look at supply chain resiliency through a more human-centric lens.

COVID-19 has highlighted previously overlooked vulnerabilities, including geographic dependencies and low inventories, and forced companies to respond on multiple fronts. For example, Target’s Community Relief Fund is supporting the health and livelihoods of their workforce, and US-based VF Corporation is safeguarding Tier 2 and Tier 3 suppliers in other countries by paying for all orders that have already been produced. VF partnered with GlobalGiving to make a grant to BRAC in Bangladesh, providing a safety net to support families affected by factory shutdowns precipitated by the COVID-19 pandemic. While immediate response is necessary and important, the true test will be how corporations consider community investment in building long-term resiliency for their business operations.

Healthy communities beget healthy businesses. Companies that invest in community development at all points in their supply chain management will be more resilient in the long term, while also building brand equity and loyalty with key stakeholders.

GlobalGiving’s mission of transforming aid and philanthropy to accelerate community-led change supports that.

According to an EY study on The State of Sustainable Supply Chains, nonprofits play an important role in keeping companies honest and maintaining awareness of sustainability issues or trends on the horizon that will impact supply chain resiliency.

By taking time in advance to understand the needs of these individuals and communities, build relationships, and invest in people’s health and livelihoods, corporations can reduce and even anticipate the impact of future business disruptions. At the same time, it puts the people most affected in the lead.

Companies that take a community-led approach to their CSR efforts are likely to be better informed, better supported, and better prepared for unforeseen challenges in their global operations. This dynamic is sure to create more trust and shared accountability for the strength of the communities businesses depend on for resources and labor.

2020 has thrown an unprecedented number of challenges at the world and has forced all of us to rethink the way we live and operate. With more than 33 million cases in 188 countries as of Sept. 28, the universal human impact of COVID-19, in particular, has put a spotlight on our vulnerabilities as a global community. As we search for silver linings from this shared experience, our hope at GlobalGiving is that people and corporations alike fully appreciate our interconnectedness and invest in shared resiliency in the face of any challenge.

Learn how GlobalGiving can help your company with grantmaking in all the parts of the world your supply chain touches.

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Featured Photo: Humanitarian aid for Rohingya families by BRAC USA

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