This page was last updated on 26th March.
The resilience of a robust supply chain is integral to the performance of many businesses.
Whether your business is large or small you and your customers need to have the confidence that supplies will be delivered at the right time, be of the right quality and at the right price.
Following the Budget 2020 the following support measures will be implemented to aide economic challenges:
- Small firms will be able to access 'business interruption' loans of up to £5m (increased from £1.2m in the Chancellor's Financial Statement on 17 March), with no interest payable for 6 months.
- Firms eligible for small business rates relief will receive £10k cash grant
- Business rates will be abolished for all firms operating in the Hospitality, Leisure, Tourism and Retail sectors, as well as for nurseries for 12 months.
Further details on this support can be seen on our Business FAQs page.
What risks does Coronavirus pose to your supply chains?
There is no doubt that many local businesses are reliant on overseas suppliers and that the Coronavirus Pandemic may start to have an impact on the supply of goods during the coming weeks and months.
China represents a key component of the worldwide supply chain eco-structure and whilst there are signs that employees there are starting to return to work, it is likely that production levels will take some time to return to normal. Overlay this with spreading Coronavirus outbreaks, across the rest of the world, and it’s easy to see that owners will need to remain agile if they are to mitigate the impact on their businesses.
What can you do to alleviate potential supply chain issues?
- Complete an end-to-end review of your suppliers/supply chains
- How many are based in impacted areas?
- Do you have multiple suppliers across different regions?
- How are your suppliers being impacted?
- Understand the likelihood of future impacts
- Consider that there are a growing number of businesses being affected across Europe
- Complete a detailed review of stock levels to ensure that you have sufficient levels to fulfill upcoming orders
- Will your own customers order levels be limited by Coronavirus – be wary of over stocking
- Develop plans to source goods from areas impacted to a lesser degree
- Ensure you plan in any increased costs and slower delivery times
- Review cash flow to take into account any higher costs - read our cashflow blog
- The following resources may be of use if you need to source alternative suppliers:
Above all, be prepared and take decisive action. Contact your suppliers and clients and work with all of them to find common ground.
Resources to help you
Engage with your key business partners
Speak to your advisors, bank, insurers as early as possible to share information and best practice, and to mitigate against potential disruptions to your business, such as cash-flow issues.
Business owners should look at the terms of their business insurance to understand if they are covered for communicable diseases or outbreaks. Travel insurance should provide cover so long as individuals and businesses follow the latest Foreign and Commonwealth Office travel advice.
Risk assessment templates and guidance are available via the Health and Safety Executive.
Understand your contractual obligations
It is important to bear in mind that you may have contractual responsibilities in terms of your supply chain. It is important to review all contracts and documentation to see what rights and remedies you may have in the event that you or your suppliers are unable to deliver to agreed terms.
Open and honest dialogue remains an important element of the business process.
If communication and negotiation fails, you may have remedies in law whether via your individual contracts or through common law. You should ensure that you speak with your legal advisors to see what options you might have should this prove necessary.
For more information get in touch with us here.