Action Versus Worry About Your Supply Chain During the Corona Crisis
There are certainly plenty of things to worry about during the current pandemic.
Yesterday, Tyson Foods took out a full-page ad in the NY Times to warn about impending shortages in the supply chain for meat.
This is not the first warning they have issued.
I suspect that this is not news to many people. Any trip to the grocery store shows that.
It would be easy to criticize the company for doing this as it might spark hoarding.
I suspect many people have enough toilet paper to last the rest of the year.
I visited a local Costco last week and there was an abundance of toilet paper for sale.
This is a much different situation than a month ago when they were out of stock.
I can only base my conclusion on what I found but I believe Costco took immediate action to shore up their supply chain.
There are still some shortages of certain products but overall, they have provided alternatives if a primary product is not currently available.
We all have weak suppliers or service providers under contract.
During normal times, it is often easier to live with the challenges then to make a change.
Now may a unique time to strengthen your supply chain.
Suppliers with a history of delivery or quality issues would be at the top of my list for replacement.
I think we have all dealt with situations when a problem supplier made a big mistake and it was actually a welcome event.
The mistake provided an easy “excuse” to make a change.
Issues like this can also provide the opportunity to find alternative products or service providers.
How often do you get solicitations from competitors of companies in your supply chain?
Every day? Multiple times a day?
Now could be the right time to try some of them out like the procurement group at Costco.
I remember a crisis that turned out to be a blessing for a construction client.
The CEO received a call on a Friday that their primary window supplier was shutting down the following Friday.
Yes, in one week.
There had not been any significant clues that they were having financial issues along with management infighting.
Their deliveries had been on time and quality was acceptable.
The CEO called me and asked for my advice. We quickly laid out a plan for the next four weeks and then one for the next six months.
Although the company was willing to single source in the short run if necessary, they made the strategic decision to utilize multiple suppliers in the long run.
The first step was to reach out to competitors who had contacted the company in the past year.
The first delivery of windows was received within four weeks.
Although this was costly due to jobs being help up there was a silver lining.
They added a second supplier within two months.
Six months later…
Field crews reported better fit and finish.
The new suppliers provided greater flexibility in delivery schedules
Cost savings were realized because of the competition for their business
I don’t know what normal will look like six months from now.
Every crisis provides opportunities once you get past the worry.
Which ones will you find?
Action Step: Finding the right tools for your needs can be a challenging process but it doesn’t have to be. If you are uncertain where to start the process of change, a procurement professional like myself can provide guidance and expertise to help your organization achieve the results you want. If you want to go explore this topic in greater detail, please contact me. I invite you to request 30-minute discovery conversation. In my experience the next step will be apparent at the end of the call. I never assume that what I have to offer will be right for everyone, so don’t expect a sales pitch. You can reach us at 973-936-9672.
If you would like to know more ways to reduce costs without changing the way you do business, simply give us a call.
You Won’t Drift to Success©
Commit to taking the next step.
Until Next Time, I Wish You Great Success in Your Business and in Your Life