Principal risks and uncertainties key Increasing No change Decreasing New Risk How we mitigate Progress in FY21 SUPPLY CHAIN DISRUPTION • Supply chain strategy in place to • Covid-safe processes continued across all ensure capacity is in line with long-term our sites to enable operations to continue Description financial plan. throughout the Covid crisis. This included Changes in global supply chain capacity, • Detailed budgeting and forecasting in a significant increase in ‘Direct to labour shortages, ongoing disruption place to match capacity to demand. Customer’ deliveries from our suppliers. from Covid-19 and geo-political instability • Business continuity plans in place for • ‘Fit for Future’ logistics capacity plan may cause interruption to the supply Dunelm non-store facilities. created with investment in a new site- of stock to our stores and fulfilment of to-store furniture hub and appointed online orders which could impact sales. • Contracts in place with third-party a new third party to provide additional Inflationary pressures linked to these logistics partners. e-commerce capacity at a new site to challenges could impact profitability. • We seek to limit dependency on meet customer demand. individual suppliers by actively • Flexible capacity in place with third Link to strategy: managing key supplier relationships. parties to support volumes and manage Customer understanding • Business continuity plans for all supply chain volatility. Product development sites reviewed including alternative Post sales experience suppliers in politically unstable • Vendor system improvements made to support higher logistic volumes. Performance indicator: countries. • New labour sourcing agencies Service levels • Upgraded home delivery vehicle fleet onboarded to add recruiting capacity Executive responsibility: with vehicle recycling plan in place. and operational working hours increased Customer Operations Director to 7 x 24 hours. Board oversight: • Renewed long-term logistics contract for Reports to: • Business continuity is a standard Audit Chief Executive Officer and Risk Committee agenda item. store deliveries and our ‘direct to store’ Impact compared to FY20: supplier operations. • Increased the size of our imports team to manage potential post Brexit and ongoing freight disruption. • Successfully managed post Brexit transition with no significant disruption. • Continued to strengthen relationships with key suppliers as well as creating new relationships to build capacity. • Increased stock visibility providing more insight of stock orders and enabling more effective supply chain capacity planning. Data breach/incident response plan who would invoke our Crisis Management Plan, if necessary. Our information security incident management process In the event of any significant data breach, we would comply is documented and tested annually. In July 2021 we also with our obligations to notify impacted individuals in a carried out an externally facilitated desktop exercise timely manner. involving a major cyber security incident, and the learnings Responsibility for privacy and data security were fed back into the crisis management process and The Chief Information Officer has executive responsibility reported to the Executive Board and the Audit and Risk for managing risks relating to IT systems, data and cyber Committee. Our process includes definitions of what security. Cyber security is a standard agenda item for the determines a major or minor incident and the steps we Audit and Risk Committee. Cyber security is also a monthly are required to take. Any major incident is escalated to standing agenda item on our newly established Risk and the Cyber Security Incident Response Team (CSIRT) and Resilience Committee with a ‘deep dive’ scheduled at least significant incidents raised to the Company Secretary and annually. The output of this meeting is reported monthly to Chief Information Officer (both Executive Board members), the Executive Board. DUNELM GROUP PLCANNUAL REPORT & ACCOUNTS 2021 87 STRATEGIC REPORT GOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION