With the COVID-19 outbreak bringing challenges to the world, several sectors of the supply chain are facing challenges to remain in operation and meet the needs of companies and consumers.
Many products and services in Brazil depend on a fast and efficient supply chain that is integrated and often operates in other countries. And, of course, companies run the risk of not being able to meet deadlines and other contractual commitments due to the impact of the coronavirus on the company itself or its suppliers.
Therefore, Purchasing professionals need to seek strategies that balance costs and risks and that contemplate product planning and even the department's daily operations in order to make the supply chain more resilient.
In the short term, the faster Procurement can conduct risk assessments across the supply chain, the easier it will be to develop an analysis-based action plan to limit the impact of potential disruptions.
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Dependence on single suppliers or a specific region, and the lack of constant monitoring regarding supply risks, are among the main problems that Purchasing departments have to face, but there are some actions that can be taken to avoid crises:
- Map suppliers and identify their risks, such as geographic region, and understand how the interruption impacts the company's business
- Analyze which purchased items may be delayed or even have their delivery interrupted. Work with the worst-case scenario
- Find alternative suppliers quickly
- Improve safety stock levels
- Encourage remote work for all administrative staff, especially those in at-risk groups
- Cancel meetings, business trips, event participation
- Prioritize the provision of protective equipment (PPE) for all employees
It is essential to monitor all suppliers and maintain an open line with them so that they can report any potential problems they are facing or may face. This allows the company to develop an efficient risk management process and have the time needed to diversify its suppliers.
Strategic Purchasing Priorities
The coronavirus could be a great opportunity for the Purchasing department to adjust priorities and carry out reviews to define new business relationships with its suppliers and be prepared for crises. Investing in a data-driven management solution allows professionals to have access to analyses of various factors, such as cost, quality, delivery times, etc., which contribute to increasing the resilience of the supply chain.
Technology is essential to bring more agility and integration throughout the supply chain and provides the necessary support to bring greater transparency to supplier management so that companies can understand demand signals and risks involved with supply.
Building a resilient supply chain is essential for companies to be able to face moments of crisis and recover quickly.
COSTDRIVERS is a Data Strategy platform that has the information you need for your business. Contact Us and find out how we can help your company in times of crisis.