It’s funny how particular themes seem to dominate for a time. They become ‘flavour of the month’ until something else takes over. The last few weeks for me have been very much about suppliers and I have been working with clients positioned on both sides of the equation.

There was an interesting article on the BBC News this week about a company called Airedale Springs. This is a small company which suffered a major fire that destroyed their premises in 2010. They were fortunate enough to be able to recover, in part due to their competitors being able to help them fulfil orders and also due to significant commitment of their employees, many of whom had worked for the company for several years.

Another client I met this week introduced me to the phrase ‘Never Out Of Stock’. In other words certain products are guaranteed to always be available on demand in their shops i.e. if a customer walks into one of their shops they can always buy this article – in this case it was clothing so that means in the size they need too.

It is easy to fall into the trap of making assumptions about suppliers – they just deliver, day after day, week after week – no need to worry because it’s all covered in the contract.

Of course it’s easy to put a contract in place to stipulate what you need, what you expect and the penalties that will be applied if the supplier lets you down. All well and good – the lawyers will take care of that for you and do their best to recover damages from the supplier who may have gone into liquidation as a consequence – but in the meantime where are you suddenly going to get the supplies you need before your own company goes bust?

When you invited the supplier to bid for your business, did you ask them about their Business Continuity Plan and the arrangements they have in place? Did you consider the risk to your organisation of them failing? What would be the impact? Did you ever consider the likelihood or risk of disruption to their premises, logistics or raw materials?

In addition, what is your relationship with the supplier like? Are you their main customer? Would you be a priority for them if their operations were compromised or do you sit behind your competitors in the pecking order? What is their market share? Could you switch to another supplier? Do you have a multi supplier strategy?

There’s a bit to think about and the risks have to be considered against a backdrop of your Finance Director insisting on the lowest possible price.

Leading up to Christmas is a key time of year for many suppliers. For the retail trade it can literally be the make or break point for the whole year so any disruption of the supply chain at this time can be catastrophic.

In the course of completing your Business Impact Analysis you will have hopefully identified the suppliers that are essential to each of your processes so you can start to work through the steps to ensure supplies will be maintained.

If your organisation is a critical supplier you should be planning for a range of scenarios to ensure you can continue to fulfil orders and ultimately to ensure the survival of your business.

This is real. It’s not just ‘flavour of the month’ so if the issues highlighted above affect you, give me a call and I’ll work with you to address them.

November 29, 2012 at 7:41 pm
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Category: Suppliers
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