5 Critical Steps to Stop your Supply Chain Disintegrating

This global pandemic we are experiencing is the most significant economic disruption since the 1930s. Apart from the human tragedies every day, we have to consider the global disruption to business in general, and in the supply chain in particular.

In response to that the team at IDDEA are helping companies ensure they have what they need to keep delivering and keep their promises to their customers.

  • Helping a construction company source the materials it needs to build much needed homes.
  • Guiding a transport company to ensure that it can procure what it needs to keep trains on the track.
  • Partnering with a major grocery retailer to keep bread, flour and canned products on the shelves.

Supply chains are under pressure; but the winning companies have developed a Five Point Procurement Plan to increase the resilience of supply and build better relationships with key suppliers. (In many cases they have also achieved significant cost savings, by focusing on the problem.)

Step one: Where do you start? Identify your top suppliers

To assist with strengthening your supply chain, start with the information you have at hand. Look at the data which can be used within your business. Your financial data provides visibility and a window into your supply base; it is the first step in identifying your critical suppliers. This spend information will tell you the story of where you are spending most of your money. It is important to measure these suppliers by spend but also by the risk they pose to your business.

To help identify top suppliers ask yourself:

  • What would happen to my business if this supplier stopped trading?
  • Would there be an immediate impact?
  • Would you experience a supply interruption or how many weeks would it take to impact your business?
  • What are the attributes of your current critical suppliers?
  • How quickly can you change to an alternative?

Any single source supply channel, regardless of spend, may be a potential issue to your ongoing operation.

What supply criteria is key for your business? – it may be cost, quality, delivery or lead-time, service or brand reputation. Make a list of your essential requirements and reference it with your supplier base. Identify your critical suppliers and make a finalised list of who they are.

Step two: Reach out and communicate – suppliers

Once identified, it’s important to stay connected with these top suppliers even if you don’t need to buy currently.

Key questions to ask them:

  • Are they still operating? (and in what capacity?)
  • Have they new ways of working? If so, what are they?
  • Are their strategies changing? (responses to difficult times tells a lot – flexibility, determination to get ahead of competition, etc.)
  • What are they doing to minimise your risk as their customer?
  • How can they support you? (renegotiate credit terms, redistribution of stock, buy back etc.)
  • Can you work together to resolve any issues or think of better ways of working going forward?

Brainstorm to find opportunities within the conversation and ensure you continue to check in with them regularly.

Step 3: Establishing new suppliers – what’s involved?

If you feel you need to explore potential new suppliers, conducting market research will better inform you. Tools like Porter’s 5 forces, SWOT analysis and PESTLE analysis are very useful in conducting market analysis.

Think about the key questions you need to ask potential suppliers. Condition them effectively by developing an RFI (request for information) template.

This should include your important considerations and criteria such as:

  • Do you require quality standards or certifications (e.g. ISO, QS)?
  • Is the supplier financially viable?
  • Will they extend you credit terms and establish a line of credit?
  • What are the costs associated with shipping goods?
  • Is location something you need to consider?
  • What are the tiers of their raw materials?
  • What are their product specifications or technical information?

Also think about the key questions you need to ask yourself:

  • Should you change your sourcing strategies to include a more local approach?
  • How will establishing new suppliers impact your costs?
  • What is your breakeven figure?
  • Can you absorb cost increases, or will you have to increase prices?
  • Will new suppliers impact your brand?
  • What are your competitors doing? Market research into your competitors response can provide interesting insights.
  • Are there government funding schemes available to help with your capital and cash flow?

When you have answered the relevant questions above, finally ask yourself: How can you use this information to bring value to your organisation?

Step four: Reach out and communicate – key clients

Reach out to your key clients and share how you are building supply resilience with them; they will appreciate being informed and knowing that their demands can be met.

Points to discuss with clients:

  • Advise clients on the work you are doing to minimise risk.
  • Listen to their concerns and enquire as to how you can help.
  • Ask can you work collaboratively to joint measure risk and plan for future growth.
  • Inform your clients of the inventory you are holding and ask would they be interested in forward paying for this stock at a reduced cost?
  • Find out if their strategy is changing and find an opportunity for you to be involved, this will help to strengthen your relationship.

Remember, you are the vital link between your suppliers and your clients, and you must endeavour to tighten that chain of supply.

Step five: Use this time wisely

Finally, look at your existing business operations holistically. Companies rarely have time for reflection and observation, now is the perfect time!

To identify what you can improve on ask yourself:

  • What were those initiatives you felt were interesting but never had time to focus on?
  • Do you need to enhance your marketing capabilities?
  • Is there an opportunity for online trading?
  • If you’re already online, is your eCommerce platform fit for purpose?
  • Is it time to enhance your online presence?
  • Can you build specifications to future proof your business?
  • Can you avail of government grants and support to enhance your online platform?

Remember …

Use this time to improve your business and plan for the near future. We will shortly see the return of employees to work and the reopening of non-essential retail outlets. You will need to develop new and innovative ways of working, both in your company and with your suppliers, that are compatible with social distancing.

  1. Analyse your data and making note of your key suppliers and materials.
  2. Collaborate with your suppliers
  3. Communicate with your customers – remember you are their supplier.
  4. Identify risks and opportunities in your supply chain and broaden your supply base. (Look for local opportunities; we all need to help each other and the answer to your supply chain might be closer than you think.)
  5. Use this time wisely.

Finally, remember that we will emerge from this period of uncertainty. What is important now is to take the lessons we have learned to build a stronger foundation from which we will rise and rebuild our businesses. We can be changed by what happens to us, but we will refuse to be reduced by it.

Stay safe and stay strong.

At IDDEA, we are committed to empowering professional buyers to positively impact their businesses through strategic sourcing. Changing buying behaviours can prove challenging, however our strategic procurement framework is proven in bringing success and improving results for businesses. Get more info here: https://iddea.ie/

 

When ”I” is replaced by ”We”

As the Irish nation re-adjusts to life working at the kitchen table, it can be difficult to switch off after ‘’a day in the office’’.

The IDDEA team are lucky in one sense as we have been developing remote working skills over a period of time and working from home is part of our weekly routine. We have a good balance between visiting clients on site and working remotely. I would love to share our top tips for staying connected during these unprecedented times.

Top Tips:

Stay in contact: Zoom or Teams are great media platforms to connect with your colleagues. Iddea schedule a Team’s call every second day to check in with each other and we never leave without a smile on our face. It is great to connect on non-work-related topics and catch up on all the latest Netflix recommendations. If you are feeling demotivated, pick up the phone and contact one of your colleagues as it can be good to hear a friendly voice and its good to know that you are not alone during this isolation period.

Stay Active: Mary Ryan- IDDEA’s eAuction Coordinator aka our virtual fitness motivator has set up a great initiative to get the team moving. She has set up an online tracker whereby we list our weekly workouts. Whether it is the daily household chores or a 2km walk, everything counts and gets tracked. At the end of every month it is very rewarding to reflect on all the good work that you have done! Yoga is also a great way to start your working day and some Instagram handles that have come highly recommended by the Iddea team: ‘’yogawithmaura’’ and ‘’yogaandval’’ both accounts run free daily yoga classes from the comfort of your own home.

 

Come dine with me: You always have the smart (or lazy) ones who take advantage of a situation to create an opportunity. Working from home has its challenges for working moms so our CEO Ingrid proposed to her family to start a “come dine with me” competition where a rota was agreed that every day, everyone different in the household was going to show off their cooking skills. A balanced scorecard was set up to track the performance and criteria such as taste, texture, innovation and presentation were rated. So every few days, food recipes are being discussed on our zoom call and recipes have been shared. And she is happy to share that her youngest 15-year old daughter is showing amazing flavour combinations and is winning by a mile!

Party-Animals: The “Young ones” of our team have their own challenges with social distancing while keeping their social life active. Every time, the “Old ones” in the team are delighted to hear about what new social media game or virtual party was organised. Bingo Loco, which was Ireland’s, go to night out has now launched via Facebook live. Bingo Loco has the same concept as traditional bingo but with a modern twist. Stay tuned to their Facebook page for updates on their next virtual bingo party https://www.facebook.com/bingolocoie/ 

 

Meet the Fockers: We have been introducing our friends and families to one another via Zoom. In many circumstances we are away from our family during covid 19 therefore, we show photographs of our loved ones whom we miss dearly or family members that live in the household pop on the screen and give a wave. We are so close as a team and it is a nice to connect on both a personal and professional level.

Back to the Future: Making a list of future plans to offset somewhat the current feeling of loneliness, anxiety or the general feeling is a great mood-booster: when the “New Normal” starts, the top 3 things I will do is…..! Sharing the big and small things we look forward is very powerful and triggers a sense of hope, excitement and energy. The negative thoughts of cancelled holidays, festivals, foodie experience, city trips and family occasions, we turn in o future plans. Only the positive “what if” scenarios can be talked about and we all get excited about each other dreams. “The Return of Investment” of sharing each future plans is 2000:1 as that is where our hope and future self lies

Staying connected and staying true to yourself, we empower each other in good and hard times. There are 3 choices in life you can make: give in, give up or give it all you got! Finding a way together to give it all you got, will make you stronger. As they say, tough times never last, tough people do. Finding the “we “ in “I” is what we are trying to do at IDDEA. We hope some of top tips of our remote working experience, might work for you. Be well, stay safe, keep close and mind each other.