The Covid-19 pandemic has changed the relationship of procurement managers and suppliers. The risk of businesses losing their ability to supply and of supply chains being disrupted increases dramatically.
It is crucial for businesses, regardless their size, to adapt their supply chains to the new pandemic constraints during their procurement process. Lean principles like “No inventory” or “Just in Sequence” aren’t the propositions of choice anymore!
The following key factors should be reconsidered – not only for your Tier-1, but also for their Tier-2 and Tier-3 suppliers:
- Credit rating: Financials are tough for many businesses in these pandemic times and the number of bankruptcies increase, so have a closer look at the supplier’s credit rating.
- Recovery plan: What is the suppliers recovery plan in case of delivery shortages and what is the timeframe behind it?
- Supplier location: Is the supplier overseas, does he cross critical borders?
- What is the suppliers inventory planning? How long does the inventory last in case the Tier-2 supplier stops delivering?
- How high is the risk that the supply chain is disrupted?
- One-Source-Procurement: What are the costs of onboarding a second/alternate supplier (ideally one, which is located in a different region or locally)?
- Is it necessary to ensure the supply quality management system (QMS) on site, or can he provide appropriate processes or certificates?
In pandemic times, old supplier risk assessments do not stand any more. Innovative procurement platforms like Alenti take already new key factors into account and stabilize your supply chain in pandemic times!