There is, perhaps, nothing more critical in a business than to develop good relationships with its suppliers. The supplier-client relationship is actually way more important than any other type of relationship within a business structure. But with the pandemic plummeting economies and disrupting every imaginable aspect of the supply chain, it is now more challenging than ever to maintain these relationships and seek new ones.
That’s why it’s important to value what and who you have now. If you have long and strong relationships with those in Lakeside manufacturing, make sure to reach out to ask about how their business is doing. It’s important to identify if there will be possible problems in the supply chain, so you can rectify the issues as soon as possible.
Sense of Stability
Cherish the suppliers you still have right now. It’s not going to be easy to forge new contracts with the disruption in businesses caused by the pandemic. Even now, when governments have already rolled out their vaccination programs, it is still impossible to travel to other states and countries to check out factories and warehouses.
But the move to a more digital procurement process has been slowly unraveling even before the pandemic. More and more meetings are done via teleconferences before the pandemic. Data analytics and virtual realities are also playing a big role in the supply chain.
Remote Communication
Telecommunication has been a long time coming in the supply industry. More and more clients are more comfortable communicating with their suppliers virtually rather than visiting them in person. This is especially true for suppliers located and stationed outside the country. As a major manufacturing hub, China is at the top of the supply chain seeing as it has its hand on virtually every industry operating in the world.
But because of the pandemic, this dominance may get affected. Experts expect some companies to reduce their China sourcing because of the language barrier and delays in shipping. Of course, this will be hard to do as no country can replace China with low labor costs.
Suppliers’ Operational Continuity
Procurement officers will also be increasingly concerned about their vendors’ operational continuity. Do they have the money to continue operating despite the pandemic? Will there be no disruption in their operations? How healthy is their business structure and model? They will begin asking questions about their suppliers’ financial health as any disruption in the supply chain will impact their output.
How important is resiliency in business? Respondents in a McKinsey survey said that they expect half of their suppliers to face financial distress this year or within the next six months. That is why buyers must dive deep into their suppliers’ resiliency so the latter’s failure will not impact their own business.
Procurement managers are also going to ask how ready businesses are for the next pandemic. A year ago, this wouldn’t have mattered to businesses. Pandemics were not an issue before, but now, a lot of questions surrounding it need answers. What will the supplier do if a pandemic happens again?
Data Analytics
Analytics will play a big role in sourcing supplies. Which of these suppliers can address issues in the supply chain immediately? How many times does it take for them to react to the problems? How are they using data to address such problems? What do consumers want? Can the supplier improve on their services based on new demands from the market?
Businesses are operating mostly online. This meant that big data would matter more than ever. Consumers want a faster turnaround time. They want products to be made with better-quality materials.
New Relationships
Companies might also have to forge new relationships with suppliers. In a survey, more than 47% of participants said they are willing to reduce their share of China sourcing once the pandemic is over. This means that they will start looking at manufacturing sites domestically. Some companies are even promising to bring back their sourcing operations to North America.
But even within the country, building new relationships is hardly easy. Businesses have to compete with bigger companies who have savvier strategies and almost limitless orders. With the pandemic still very much a problem, they also have to forge these alliances through teleconferencing and virtual events.
Who said that the world would go back to what it was before the pandemic? No one. The challenges of running your business will continue in the foreseeable future, especially when it comes to your supply chain. Fortunately, technology will once again save the day and make it possible for industries to survive and even thrive.