SUPPLY CHAIN Resilience

Is our latest crisis urging sourcing to shift from centralized to more de-centralized? by Arthur Fellinger

After the first shock of Covid-19 the world in which we do business has come virtually to a stop. It is becoming time for businesses, entire supply-chains jointly even, to focus beyond solving immediate issues. In this way, your company prepares to emerge when business picks up again after this probably long-lasting crisis by working NOW in and with your procurement department and suppliers on Supply Chain resilience.

For your benefit we have listed some key steps you could take to review your Supply Chain resilience:

• Know your supply base; where are your supplier's production locations?

• Know your portfolio of products; which ones are the ones you want to grow, which are the ones your business floats on?

• Know your critical raw materials; single-sourced or locked-in by your vendor(s)?

• Determine the risks; 'Probability of Hick-Ups' times 'Impact on your Deliveries'.

• Decide your response for the critical items; balance measures vs the risk appetite. 

• Map the sourcing alternatives; centralized vs de-centralized, global vs regional?

• Get your internal stakeholders (Finance, Operations, Sales) behind your plans; total cost vs cost of resource vs the cost of disruption.

• Balance your new supply base based on the alternatives; quality - cost – volume.

• Start building a durable relationship with your suppliers; as you shift from centralized to more de-centralized sourcing.

As the leaders of your company start thinking of the revised targets you will need to set for your procurement team; focusing now more on a resilient supply chain, moving away from just a savings target or a supplier reduction target. Make procurement an executive board responsibility not as part of issue management but with a focus on the future as an integral part of your Sales & Operations Planning (S&OP).

Contact via below one of our experts to learn more