Procurement playbook is a monthly blog post series, where we invite experts from across buying to provide their insight, tips and recommendations to help you become a better buyer.
In this month’s blog post we speak to Chris Mullen, Managing Director at Procure4, a leading procurement consultancy, offering services to some of the best-known brands in the country.
We spoke to Mullen about COVID-19, how he thinks it’s affecting supply chains and what he’s seeing day-to-day as he offers consultancy services to his clients.
Q: Thanks for talking to us today, Chris. COVID-19 has caused significant disruption to global supply chains. It has resulted in shortages of commodities such as electronics, food and many other things. How do you think procurement professionals should approach their suppliers as European nations emerge from lockdown?
A: I think supplier relationship management is going to become increasingly important as we navigate our way through the COVID-19 pandemic. Building stronger relationships with your suppliers and making them feel valued and important is going to be key to restore confidence in supply chains.
This is important for smaller providers in your supply chain to ensure they continue to survive, but it’s also valuable because your vendors will appreciate the time and care you’ve shown them. They’ll consider you an essential supplier – one that they bend over backwards for – if they can.
Q: How long do you think it’ll take for supply chains to get back to normal?
A: That’s a good question! According to medical experts, we’re going to have to live alongside COVID-19 for quite some time, so I wouldn’t expect supply chains to go back to the way they were for a while yet. The pandemic has had a major impact globally, so I’d anticipate we’ll be living with the consequences for many months or years to come.
Q: What tips can you give procurement professionals as they navigate their way through this crisis?
A: Having a focused strategy to engage collaboratively with suppliers to drive innovation in challenging environments is essential. This can take form as a supply chain risk strategy, as well as a business continuity strategy.
Q: What do you think a supply chain risk strategy should look like?
A: It’s really a multi-pronged approach. You need to gain a complete understanding of which suppliers are most critical to your organisation and channel resource into these areas to shore them up. Then you should spend time analysing and intimately understanding the risks within your own supply chain. So, it’s really a case of focusing on what risks exist in your supply chain and then working on a plan to reduce those risks.
You should also categorise your strategic suppliers and prioritise building and improving your relationships with them.
Finally, once you’ve done all of that, make sure the C-suite knows what you’re doing and earn their buy-in to maintain this approach to managing your supply chain.
Q: What three things can buyers do right now to reboot their supply chain?
A: First, you should determine what part of your supply chain provides key components for your products and/or services and ensure that remains maintained no matter what. This includes complete transparency of every aspect of your supply chain and identifying the weak links. Once you’ve done that, put in place mechanisms to source alternative supplies should key vendors become unavailable.
Then you should review and optimise internal production and product distribution capacity to make sure you’ve got the safest possible conditions for employees working in different parts of your supply chain. Not only is this an ethical thing to do, but if left unchecked, it can cause you issues further down the line. You might not be able to source key goods, and if a supplier is behaving in an unscrupulous way it could reflect poorly on your organisation.
Finally, stress test your supply chain to understand and mitigate weaknesses. Existing suppliers may be close to collapse and alternative vendors may not have full capability or limited logistical capabilities. Make sure you’ve got the ability to recognise and react to these risks quickly.
Q: What you can you do in the long term to mitigate supply chain risk?
Rationalisation of the supply chain is something that you can do now. It not only simplifies everything, but it also reduces uncertainty and risks. Your vendor relationships, once taken through the earlier stages are strengthened, giving you plenty of opportunities for collaboration and development.
Finally, you should commit to really gaining a deep understanding of your supply chain by conducting a thorough analysis. Make sure to consider ethical, environmental, economic, and other factors that may affect it.
We’d like to thank Chris for sharing his expertise with us. If you’ve enjoyed this instalment of Procurement Playbook, why not head over to our Twitter and LinkedIn pages to join the discussion? Or for more information about how Wax Digital improve your procurement processes please visit our homepage.