Business as usual: Sourcing in times of uncertainty
Procurement professionals, especially those responsible for the Sourcing of goods and services, are used to dealing with large swings in demand and supply. But the effects of Covid-19 are proving extremely difficult for even the most adept sourcing practitioners.
The recent situation has intensified levels of uncertainty faced by sourcing professionals, including price volatility, mounting supplier failures, recurring capacity and material shortages or oversupply.
There are, however, some best practices and tools that can help deal with not just uncertainty in demand and supply, but supplier failures, price volatility, and supply chain risk.
Improve the effectiveness and transparency of both strategic and tactical sourcing
Obtaining best value for an organization will be critical, not only to success, but in some cases to survival. One way to achieve this is by improving the effectiveness and transparency of both strategic and tactical sourcing processes, all while reducing administrative time and effort. There are strategic tools available that provide flexible, collaborative, and
efficient methods for performing effective sourcing events of all types
.
Get what you need
Accurately and effectively managing sourcing events should be a priority in “normal” situations, but being able to
easily and quickly define and manage each sourcing event is now crucial. There are tools that enable you to specify dates and questions and score responses automatically. You can also get multiple quotes for one-off purchases, through one system, and create a level playing field for competitive bidding.
Manage your supplier base
Building a strong supplier base may not be the main priority at the moment, but maintaining your base should be. This can be achieved by structuring and streamlining the entire supplier lifecycle – from initial identification to adoption, approval, transaction and analysis.
Proactively monitor and manage supplier risk
It’s more important than ever to proactively monitor which suppliers are at risk, and have contingency plans and/or alternate suppliers in place. There are
tools available to provide early warning of suppliers who might be in trouble. It is also useful to monitor potential trouble indicators yourself - e.g., a supplier desperate for shorter payment terms or delivery or quality performance issues. Contingency plans are essential, especially when there are few or no alternate suppliers.