As we enter the last quarter of a year defined by disruption and uncertainty, supply chain and procurement professionals are asking themselves one question: How can we avoid this pain in the future?
The executives they work for are wondering the same, worried about the financial impact of even more chaos.
SourceDay’s CEO, Tom Kieley, sat down with NetSuite’s Go Kamiyama to discuss just that. The conversation, hosted by the Art of Procurement’s Philip Ideson, centers around actionable steps businesses can take to make their supply chain more resilient and examines industry trends.
Here are just a few of the highlights. Catch the full webinar over here.
How Will COVID-19 Impact Supplier Networks?
One of the first questions revolved around supplier networks, specifically if they’d shrink or expand in the wake of COVID-19.
According to Tom Kieley, industry trends point toward broader supplier networks. While it might be tempting to lean hardest on suppliers you can trust, diversifying your suppliers allows you to pivot quickly if your go-to supplier can’t meet your order needs.
The Effect of COVID-19 on Supplier Networks
Go Kamiyama also pointed out that global suppliers can help to avoid regional disruptions, and he’s seen several manufacturers looking to Latin America to form new supplier relationships.
The Upside of Connectivity
Expanding your supplier network also means more back-and-forth communication. Old-guard channels like emails and phone calls make managing all that back-and-forth complicated, which is why moving toward systems that connect with one another and share information instantaneously will be a key step in expanding the supplier network.
According to Tom, connectivity has long been a focus for manufacturers in their sales operations, but hasn’t been a priority in the “back of the house.” He expects to see a bigger emphasis on information sharing with suppliers to ensure that nothing slips through the cracks and manufacturers have the parts they need, when they need them.
Go was quick to point out the financial upside of connectivity, too. Being able to rely on suppliers to fill orders on time helps protect cash flow, which is something every finance team tries to do, particularly in moments of uncertainty.
The Forgotten Side of Supply Chain Connectivity
Addressing Demand Changes Head-On
One of the toughest aspects of dealing with supply chain disruption is handling the down-stream effects of demand changes. As we’ve seen during the COVID-19 crisis, some industries have experienced huge booms. Obvious examples like cleaning products come to mind. But we’ve also heard from grill manufacturers and boating manufacturers who have had record years.
On the other hand, some industries took big hits, like aerospace. But whether you’re rushing to meet increased demand or wading through a long list of order cancellations, it’s imperative that those changes are communicated to suppliers as soon as possible.
Why Collaborating With Suppliers is Critical
Go Kamiyama pointed out that forgetting to cancel a purchase order for some expensive parts you no longer need wastes cash. And not getting the parts you do need risks revenue.
That’s not all the panelists had to say about building supply chain resilience. Watch the full webinar here to hear Tom and Go’s suggestions on how to get started improving connectivity.
And a special thanks to Art of Procurement for hosting!