Although it seems we are halfway through this catastrophic situation, the end of 2020 is almost here. The real numbers show us that they are still high in many countries where our Supply Chain (SC) might extend. Therefore, Procurements and SC leaders have to be more aware than ever to avoid any imminent risk. The more complex your Supply Chain (SC) is, the greater the need for impeccable tracking system.
When we were at the onset of the emergency, 97% of SCs were affected; since then, it seems the global SC has become stable but still at risk, affecting Health, Economy, Education, Supply Chain. Industries are gradually re-opening operations and services. But, are we taking the appropriate steps to overcome it?
What is the best way to protect our SCs?
People and businesses around the world are making great efforts to adapt to the ¨new norm.” It is for sure we have not fully recovered at all. Changes will be challenging to manage, so we have to be watchful for possible turnover. Coming months will be crucial to reinforce our SCs.
Every single section in our Procurement and Supply Chain Management (SCM) has its only concerns and challenges, and the mobility section is no exception. Buying services, not commodities, present difficulties and supporting numerous countries increase the complexity significantly.
Global mobility and SC managers often are annoyed over suppliers who cannot meet the latest data security conditions or ignore anti-bribery regulations; support suppliers when these issues arise. When managed this support smartly, it should work smoothly, resulting in a better employee’s understanding necessary for every solid SC, granting high-service levels and also to caring for mobile employees and clients.
Areas of governance and compliance to foster SCM functions
Consistency – Level all suppliers to equal principles, no matter the size or service, as risks are equally present. Invest in those suppliers that are enthusiastic and deliver top service who meet the standard due diligence.
Contracts – Every supplier should have a detailed service contract, including a) significant capacity of services; b) Significant Service Level Agreements (SLA); c) Ranks of reporting. Robust stipulations matching the company’s requirements for the service supplied.
Audits and assessments – Perform audits that check several factors of a supplier’s performance, including a) Delivering a copy of the supplier’s current business license or insurance certificate. b) Adhering to companies’ system updates requirements. c) Completing the latest anti-corruption training.
Complete routine assessments as well. Thru these evaluations, supplier chain teams check suppliers’ service delivery methods, review the skill sets of local groups and certify they are providing services as expected.
Supplier assistance – Effective SCM requires support for suppliers adding up to managing the conditions of the contract; for instance, proposing templates on how to improve an operative business follow-up plan.
Service training – Suppliers are also part of your company’s brand and must be trained to supply services according to your company’s brand prerequisites. In this way, you can safeguard suppliers deliver services continually despite location. Having online video-based training will bring better consistency and access to practice.
Consistent training – Training must be consistently available agreeing to the company’s principles such as anti-bribery and corruption. A suitable training guarantees real comprehension and pro-actively moderating risk for enterprises and mobile workers; signing only a compliance contract will not be enough.
Legal updates – Suppliers need up-to-dates on modifications in the law. Although it is the supplier’s accountability to be well-informed of all changes in laws or regulations affecting their company, SC managers should take the whole responsibility, making suppliers recognise the modifications and persists in compliance.
Compliance inspection – Evaluating a supplier’s compliance must carry out regularly, confirming that each supplier is following your business principles. Making available updated training regularly, guaranteeing all levels of suppliers take part in the evaluation, to checking a supplier’s compliance and performance results offer suppliers the chance to restore service levels in case they fall.
Detailed Request for Proposals (RFPs) – To truthfully measure services in a market, an RFP should enquire an e-procurement area and certify the answers. a) Spending in-site visits at suppliers’ location and taking part in relocating employees. b) Assess service levels; have a conference call, and take a home-finding tour with the supplier. c) Audit compliance.
RFP phases – Determine an appropriate RFP cycle for the types of suppliers in SC, by carrying out RFP questions, hosting site visits, negotiating contracts. Industry top SC operations would be more understandable of resources needed to carry out an RFP and applying different tactics to conventional RFPs.
Education of client and customer – Informing employees about the risks of sourcing suppliers who have not been well-valued. It is vital to instruct all shareholders on the complications of supplier selection, as it implicates much more than just offering an outstanding service experience.
Email security – Suppliers, including field consultant and freelancers, must not share confidential information nor use of personal email accounts (Gmail or Yahoo) or sharing personal identifying information, social security numbers, date of birth. It should only be revealed in a secure email and always encrypted.
· Defining your SC resilience is a must throughout the recovery process.
· Getting a realistic skimmed on supplier strength is always a challenge; regularly check and monitoring.
· Keeping the focus on the big picture; be aware of the entire market as everything is connected.
· Becoming a more risk-aware is an essential step in the recovery and resilience process.
· SC and Procurement leaders can take different actions, according to what their company experience.
· If still into crisis, grant extra resources to Risk Management.
· During recovery, enlarge the consequence of risk in decision making.
· Whilst in the new normal, promote risk alertness by unifying all shareholders crosswise the organisation.
· Hold weekly cross-section meetings to detect and deliberate what is happening on the risk front.
· Involve everyone: quality, engineering, planning, operations, finance, R&D, sales, and more.
Conclusions: Accountability is on Procurement and Supply Chain teams to ensure operations do not crash. Certifying the answers can expose multi-layered inconsistencies among current service deliveries and the RFP responses. The next months are critical for building up SC safeguards against a possible coming wave.
Are your Procurement leaders ready to fortify your company’s Supply Chain?
David Food is the Strategy Director of Prophetic Technology. He brings a significant breadth of skill, innovation and capability in the use of software and technology to improve supply chains, develop marketing and unlock business potential, whether globally or locally, with collaborative or enterprise-wide solutions.