Industry Talk

Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

5 things you must do when rebooting your supply chain post-pandemic

The Covid-19 pandemic has brought significant disruption to the global supply chain, from the panic buying associated with the first lockdown to the continuous stress of ever-changing conditions, suppliers are still under an enormous amount of pressure to remain viable. However, with the UK government introducing a road map to help navigate the country into the new normal, it’s time for businesses to reassess their supply chain risk.

Over the past year, many organisations have adapted their business models to sell products via alternative channels by investing more into the online experience and strengthening their digital support networks. While eCommerce has enabled some businesses to continue trading, ‘bricks and mortar’ has been forced to reboot and freeze its supply chains multiple times over the past 12 months.

For instance, The Food and Drinks Federation revealed that a third of all supply businesses reported a decrease in sales, despite its brief time open between July and October last year. There are countless cases where suppliers have wasted huge volumes of goods or ceased trading completely losing enormous amounts of profit. As a result, businesses need to be prepared for scenarios where the suppliers they’ve previously formed partnerships are now no longer able to re-establish relationships and be mindful that there is still a long way to go before any kind of ‘normality’ is reached.

To ensure continuity, the first thing organisations will need to consider is how to mitigate the risks involved when rebooting their supply chains. From building relationships with new suppliers to identifying business critical services, procurement professionals have a huge responsibility on their shoulders, and it’s important that it’s approached in the right way. With restrictions for many industries ongoing for the foreseeable future, how should businesses approach supply chain management to ensure short term success?

 

  1. Build supplier relationships

Supplier relationship management will become increasingly important as businesses navigate the new business landscape. Procurement teams can build stronger relationships with suppliers by making them feel more valued. This can be achieved through more regular contact, paying them on time and updating them on any strategic changes.

 

  1. Develop a supply chain risk strategy

A supply chain risk strategy is a multi-pronged approach. To begin with, procurement teams need to gain a complete understanding of which vendors are critical to their business in order to channel resources into these areas. Then, time needs to be spent on analysing and understanding the risks that exist within the whole supply chain to minimise the chance of any of these issues occurring. Categorising strategic suppliers and improving relationships can make the process more efficient. Communicating your approach with the C-suite is also important to ensure full transparency and to maintain consistent operations.

 

  1. Identify business critical services

Transparency is vital when determining which part of the supply chain provides the key components for your organisation. This will help identify the weak links while ensuring that business critical services and products are maintained. After establishing what you can’t do without, it’s important to put measures in place to source alternative supplies if key vendors become unavailable.

 

  1. Champion a safe working environment

While it’s always been crucial to ensure you have the safest possible conditions for employees working in different parts of your supply chain, Covid-19 has encouraged businesses to introduce additional measures that focus more on the health and wellbeing of the workforce.

If left unchecked, this can cause issues further down the line. For instance, if a supplier is behaving in an unscrupulous way it could reflect poorly on your organisation; or, it could impact your ability to source key goods.

 

  1. Conduct a ‘stress’ test

Finally, stress test your supply chain to understand and mitigate the weaknesses. Existing suppliers may be close to collapse and alternative vendors may not have the capability or logistics to fulfil requirements. This will give you the ability to recognise risks and react to them quickly.

It’s clear that rebooting your supply chain is going to take careful consideration and there are a number of steps needed to mitigate potential short-term risks. However, gaining a deeper understanding in the early stages and what factors could affect it will strengthen the supply chain in the years to come.