How will you weather the next storm? Building a stronger supply chain – News Couple
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How will you weather the next storm? Building a stronger supply chain


In the procurement world, there is always another crisis around the corner. Time and time again, the industry has been shaken by various upheavals and forced to reconsider how to weather the storm better than we have been in the past.

Unfortunately, the recent turmoil proves that companies have not yet taken the necessary steps to protect themselves from the horrific effects of crises such as lost revenue, negative effects on consumers, and more. So how are procurement professionals supposed to build stronger and more resilient supply chains that are resilient enough to withstand these unfortunate events?

check the past

Crises can happen at any time, and they often cause a number of devastating consequences. Unfortunately, when it comes to better preparation, the old adage “history repeats itself” certainly applies. One of the best ways procurement leaders can learn from past mistakes is to be fully aware of what they are facing.

natural disasters

The past decade alone has provided its fair share of natural disasters causing major disruptions to the supply chain. The earthquakes led to millions of energy losses and an abrupt halt in automobile manufacturing. Hurricanes and hurricanes around the world have damaged transportation hubs and caused fuel shortages, while agricultural losses have affected local, national and international product supply chains.

Man-made crises

In 2015, the port of Tianjin in China faced multiple explosions and uncontrollable fires due to the lack of proper safety protocols – thousands of vehicles for sale were destroyed and many buildings were endangered. In 2016, the new Brexit ruling changed a number of employment, trade and travel regulations, bringing economic growth to a halt in the UK.

COVID-19

Needless to say, COVID-19 is the biggest shock the supply chain industry has ever seen, and it’s not over yet. With unprecedented disruptions and exponentially increasing demand for supplies, in less than two years, this crisis has brought supply chains around the world to a grinding halt and cost the industry an estimated $28 trillion in lost revenue.

Use of data to protect against disruption

Without plans — and the ability to implement those plans properly — organizations will face the same turmoil again. While procurement leaders cannot prevent a crisis, they can create a contingency plan that will allow them to weather the storm without experiencing major disruptions. The formulation of this plan begins, first of all, with good supplier data.

Think about it: supply chains encounter disruptions when a supplier that was intended to provide a good or service cannot do so. If you have solid resource data at your disposal, you can make a plan to replace that resource quickly before a major disruption occurs.

The problem is that very few organizations have this robust supplier data in the first place. In fact, 72% of procurement leaders are concerned that their supplier information has not improved since the COVID-19 pandemic, leaving them weak and unable to stay agile. Ironically, 96% of the same group agree that flexibility is more important than cost savings.

Improve data management

To improve supplier data, procurement teams first need to examine how the data is collected and managed. Oftentimes, they use manual methods – such as web searches and spreadsheets – to track information, but this leaves data isolated and unable to quickly find alternative and diverse suppliers.

To improve resilience, organizations need to invest in technology that automatically harvests, analyzes, and improves supplier data. This digitization allows for better flexibility so that they can easily find the suppliers necessary to maintain a strong supply chain.

Building supplier diversity programs

When planning crises, a good contingency plan will always include alternative suppliers, methods and production models. No matter how many or how many suppliers your organization works with, there is always room for diversification to allow for better responses to any disruption.

Planning to use alternative suppliers is one thing – finding them is another. Using an automated digital supplier discovery system can help purchasing teams find diverse alternative suppliers in a fraction of the time compared to manual methods.

Strong data is the key to weathering the storm

In the world of procurement, it is not a question if There will be a crisis coming, it’s a matter when will hit. By learning from past mistakes and improving access to high-quality supplier data, your organization will be able to handle crisis with agility and resilience, and stand strong against disruption.



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