The northeast corridor is bracing for the third Nor’easter of March. I wrote about strategic sourcing and planning after Irma and Maria. These winter storms are a stark reminder that that planning for disasters should be SOP.
If you have never lived through a Nor’easter – it is a hurricane with snow.
When it comes in March it brings heavy wet snow that topple trees and knocks down power lines.
It can take days or weeks for power to be fully restored. This may seem small in comparison with the pain still being felt in Puerto Rico but it is still a challenge.
Clearing roads and parking areas becomes a significant issue especially with six inches or more. Two lane local roads become one lane. Rail service is often suspended.
Deliveries can take two or three times as long as normal.
Disaster planning is easy to put off.
There always seems to be plenty of other tasks to complete.
I believe that the best time to review your readiness is right after a storm. We often learn more from losses than wins.
All the things that went well or not so well will be fresh in your mind.
As a first step I would recommend that each member of your team detail their experience. Then the impact should be quantified – both plusses and minuses.
Procurement professionals evaluate suppliers and service providers as part of their ongoing tasks. It can often be attractive to bring on a new supplier if savings appear significant.
Before making a change, I would suggest that you consider these questions in your evaluation:
- Have you taken all necessary steps to fix whatever is not working with your current supplier?
- How critical is this product or service?
- What would be the budgetary impact if there was a prolonged supply or service disruption?
- What geographic regions are they expected to service?
- What plans do they have in place to insure they will be able to deliver after a natural disaster?
- Will they share their backup plan including suppliers or service providers?
- Will they become the primary or backup supplier?
- How long will the changeover take?
- What is the cost to make this change?
- Do they service any key competitors?
- Will they share their on-time record during other disasters?
- If your company continues to grow, will they be able to meet the additional demand?
- What is your plan if this doesn’t work out?
These or associated questions can be part of your onboarding process.
In my experience there is one question that is rarely asked but it should be every time. “How important will our business be to this new supplier?”
Think of it as a background check. If you do this each time, you will be surprised at least once in a while.
I realize that you can’t eliminate all potential disruptions but understanding what products or services are critical to your company is essential.
There will always be factors that are more difficult to evaluate.
I am never in favor of using a supplier that supplies a key competitor since you will not be able to gain a competitive advantage.
If you have operations in areas that are prone to weather disruptions, it is likely that this type of evaluation is normal.
It is a bigger challenge to take the right planning steps if you or your supplier are rarely impacted by natural disasters.
Evaluating all the factors before considering an attractive price is smart sourcing.
Ask better questions, make changes and 2018 will be your best year ever.
Action Step: 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 me at 973-936-9672.
If you would like to know more ways to reduce costs without changing the way you do business, simply give me a call or send me an email with your contact information and the best time to reach you.
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Until Next Time, I Wish You Great Success in Your Business and in Your Life