How client organisations can build supply chain capacity and resilience March 2022

Since March 2020, discussions surrounding supply chain risk and capacity has come to the forefront due to circumstances beyond our control. From the hoarding of toilet paper at the beginning of the pandemic, to more serious issues such as the shortage of building materials and queues of lorries waiting to go into Dover to deliver British goods across Europe.

The combination of a pandemic and Brexit has made most of us view the world from a glass half-empty perspective. ‘We are heading for another recession’,  ‘my business is going to shut’, ‘support is not available’,  ‘is this a force majeure event?!’. In all of this, you can imagine the plight of suppliers and subcontractors, especially SME organisations.

For construction and infrastructure, 80% of spend is within the supply chain, and both organisations, and projects rely upon procurement for sourcing what they want, the delivery of the requirement, and the management of it.

Supply chain organisations’ reaction to Covid and Brexit was following a pattern of coping mechanisms:

• React: Ensure the safety of their employees and focus on critical needs.
• Resilience: Adjust short term strategies to survive whilst managing the risk.

And as things started to sink in and become ‘normal’:

• Rebound: Reinvent the business to become better than before.
• Settle-in for constant change: Anticipating new variants, expecting more administrative. paperwork, and building in resilience across the value chain.

Resilience is defined as the quality of being able to return quickly to a previous good condition after problems.

In resilience planning and adapting to the new normal, an organisation should consider:

• Cash and materials planning – are payment terms an issue, have you spoken to your client?
• Operational review – review new government guidelines on how to operate safely, what worked well, what went wrong?
• Supply chain sources – are all your eggs in one basket? Have you got multiple sources available? Global or local supply? Is there reliability and transparency of what is being supplied?
• Relationship management – continuous, open, and honest communication with your stakeholders, use technology to your advantage.
• Digitalisation – communication tools such as Zoom, Teams, CRM or SRM systems for process efficiency.
• Scenario planning + risk and opportunity planning – if there is another lockdown, variant, pandemic, what is the risk to your organisation? How will you mitigate it? How will you adapt this time around?

What can client organisations do to help build supply chain capability capacity and resilience:

• Create supply chain ecosystems – collaboration with strategic raw material suppliers and external service partners is also vital to ensure better preparedness and resilience.
• Monitor supply chain performance and have a line of sight of end user consumption and usage patterns.
• Access to end-to-end supply chain inventory data and supplier capacity constraints, which can be usually done via the PQQ process in procurement.
• Collaborative planning with suppliers and end users.
• Upskilling the supply chain.

The health of the supply chain and it’s wellbeing comes down to collaboration among parties: client-supplier relationship or suppliers and their further tiers.

If you’re interested in learning more on this topic, the Supply Chain Sustainability School will be hosting a FREE in-depth webinar on Thursday 24th March, looking at supplier resilience and capacity issues in the supply chain. Secure your place here.