Supply Chain Resilience; Managing the risk of Service Level Agreements.

An issue that is frequently raising it’s head again is supply chain resilience, and blind dependence on Service Level Agreements to ensure a resilient supply chain.  This is particularly acute in large contracting relationships where complex bespoke contracts are used to ‘outsource risk’ without appropriate levels of assurance.  It does, however, affect organisations throughout the feed chain!

Many organisations rely on contractual obligations (including SLAs) to ensure the delivery of critical services, without considering the operational implications of failure of these agreements.

The core problem here is that even where SLAs are in place, a contractual obligation does not necessarily provide tangible resilience.  Legal recourse may be possible in the event of a failure, but that does not keep our wheels turning unless we have some contingency arrangements in place.  Failure of an SLA is not an acceptable excuse for our own failure to deliver.
Unless we can gain appropriate levels of assurance to support claims of resilience, the ability to seek redress in the event of an SLA breach does not generally, in itself, give us practical protection.  In addition,  a weakness in the chain several links away may be invisible.

Where does this leave us?  If we seek to deliver a truly resilient service, then claims of resilience at every link in the supply chain must be underpinned by a credible architecture as well as contractual frameworks.
In practical terms we must ask ourselves how we will sustain critical operations in the event of an SLA breach:
  • Do we have a clear picture of those services and organisations on whom we depend to deliver our core service?
  • Do we have visibility of how our critical dependencies will assure service delivery in practical terms?
  • Do we have effective contingency plans to protect those areas where we don’t have clear visibility, or confidence?

And if we don’t have a satisfactory answer to any of these questions, then we need to find one.

Managing Director of SRM, Tom F is a regular contributor to the SRM blog.

Posted 5 years ago on · Permalink