Written by: Faith_Thurnwald
The world’s supply lines have been rocked by the outbreak of the coronavirus. New suppliers were scrambling to fill holes that were beginning to materialize as countries tightened their borders and imposed travel restrictions. Management of supply networks began to unravel as previously tightly controlled chains took unprecedented risks to keep things moving.
It was more important in early lockdown to react quickly than it was to conduct thorough due diligence. The supply chain management process had to be sped up because there was no time for anything else. Retrospective fill-in was possible if you were lucky, but in most situations danger was just assumed.
Make an effort to learn more.
Now that businesses are adjusting to the new normal, COVID-19 has compelled many to reevaluate their supply chain structure and their future procurement strategy. The pandemic has prompted a demand for information, which just launched a campus in London. Buyers also need to know how much money they’ll be spending on a product or service.
Instead of just checking boxes, buyers are now digging deeper to determine the viability of their suppliers and whether or not they are overstretching themselves, according to one expert. As a game of balancing speed against risk in the buyer-supplier relationship.
Things like human trafficking, exploitation, and modern-day slavery are easy to overlook when moving at a breakneck pace. A supply chain’s visibility and resilience may be greatly improved by creating a supplier map. It’s no longer enough to know who your primary suppliers are.
Make the switch to digital and begin data analysis.
A layered supply chain can benefit from improved visibility and communication thanks to investments in technology and information flow. Occasionally, a supply interruption isn’t caused by your primary vendor, but rather by a vendor who supplies that primary vendor. Digitalization and big data are also expected to have a significant impact. Because it relied on efficiency rather than being an operational necessity, data has long been part of the supply risk assessment process.
Using data and analytics, organizations can now detect suspicious behavior. An accurate picture of supply chain operations can be developed by mapping company linkages and untangling vast amounts of data. A huge shift in digitalization will be triggered, according to Laws, as a result of the outbreak. When a lot of individuals are working from home, it is obvious to see the faults in depending on scanned documents and a precarious paper trail.
Partner up with others.
Access to all relevant information about suppliers is essential to gain a comprehensive view of the situation. The increasing collaboration will be the next step in this approach. Organizations are learning the value of working closely with suppliers who are also facing supply-chain challenges, such as managing cash flow and protecting their bottom line.
A transition away from transactional and cost-focused supplier relationships has been quickened in this way, with a focus on collaboration and teamwork to reduce the impact of events such as COVID-19.
Don’t just focus on price.
There has always been an overemphasis on cost rather than resilience in supply systems. If another disruption occurs, the investment in connections and a flexible supply chain will be well worth it, even if it means spending more money upfront. Another trend aimed at reducing risks in the transition to multi-sourcing, which many corporations discovered at the beginning of the pandemic.
Customers have grown their supplier networks to be more robust, spreading the risk. For this reason, many companies have cut ties with the global supply chain and are looking for alternatives that are located much closer to where their customers live. Big companies are increasingly purchasing parts of the supply chain, shunning outsourcing in favor of retaining their skills.
Companies took extraordinary risks at the beginning of the pandemic to fill supply chain holes, but many are now better prepared for future interruptions. Shortly, supply chain management will be reliant on due diligence and creating relationships as constants. Organizations today have a real need to implement processes and technologies that make sourcing and onboarding suppliers as quick and easy as feasible.
How to pick a supplier in the new environment
Increasing numbers of businesses are investing in technology to acquire the visibility and knowledge they need to respond swiftly. Having a list of all suppliers might assist a company responds to changes in demand or disruptions like the coronavirus outbreak. Knowing a supplier’s location is critical since you never know when or where a lockdown will occur.
2. Don’t just think about the expense.
Overreliance on cost-cutting strategies has left many organizations with limited options when their supply chains are interrupted. When it comes to purchasing decisions, reliability and supply security should take precedence above the cost of the product.
Having diverse suppliers reduces risk and the likelihood that operations will be disrupted, which in turn helps to increase resilience. Another effective strategy is based on building trust through affiliation, and networks of businesses are beginning to pool resources and collaborate.
4.The creation of new collaborations
Customers and suppliers must work together in the face of today’s challenges. It is preferable to work together rather than impose penalties on those who fail to meet customer expectations, as penalties can backfire when organizations are in trouble.
5.Don’t skimp on the necessary research.
It’s more important than ever to do your research before selecting new vendors. The reputation and efficiency of a company’s supply chain might be jeopardized if a supplier is untrustworthy.