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Building a resilient supply chain

As the Ukraine crisis continues to unfold, it is important to ensure that all businesses across Greater Manchester feel supported and are prepared against potential disruptions to their supply chain.

Ensuring the resilience of a robust supply chain can be challenging due to the interlinked nature of supply chains.

Chris Rogers, principal supply chain economist at freight forwarding company Flexport, told Supply Management“Procurement teams have to really take a hard look not just at their direct procurement during this conflict, but also their indirect procurement. Supply chain and procurement managers also need to be investing in visibility. Where are your shipments? Where are they coming from, and where are your suppliers' suppliers' situated?”

Whether your business is large or small having the confidence that supplies will be delivered at the right time, be of the right quality and at the right price is integral to your performance.

What can you do to alleviate potential supply chain issues?

Having good visibility of your supply chain is key to ensuring that you have an accurate assessment of the potential risks to your business and have the ability to plan for potential crises.

  • 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?

     Build a resilient supply chain with our Supply Chain Fundamentals fact sheet.

  • Understand the likelihood of future impacts

  • Complete a detailed review of stock levels to ensure that you have sufficient levels to fulfill upcoming orders
    • Keep in regular contact with your customers in order to get a good idea of upcoming demand to enable you to make a forecast. Keep in mind that their demand levels or order patterns may have changed. 
    • Be wary of over stocking. It is tempting to over-order, just in case, but keep in mind that the theory of Just-in-time still stands. 
  • Develop plans to find alternative sources of supply to reduce the risk. Make sure that you assess any new suppliers to ensure that they meet all the required standards.  
  • Consider your strategic priorities: Which customers are key to your business and should you prioritise? Which product lines are most profitable to you and for which do you have a secure supply? Consider these factors when planning and forecasting.
    • 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
    • Consider if your product could be redesigned to use alternative available materials
  • 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. 

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.

 Greater Manchester SMEs looking to increase their resilience to supply chain disruption are encouraged to speak to one of our dedicated Manufacturing Advisors.

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