CHALLENGE YOUR MINDSET WHEN IT COMES TO YOUR SUPPLY CHAIN APPROACH!
by Team Pinnacle
For supply chain success, businesses need to look past the standard misconception that it must be transactional to garner value. Putting the health of supplier relationships at the heart of the supply chain helps companies of all sizes to thrive in challenging times.
Over the last number of years, there has been a huge focus on driving costs down to make supply chains leaner. Some businesses have also used a single supplier to gain economies of scale and drive prices down further. However, we are now seeing that the cheapest suppliers are not necessarily the best able to operate through difficult trading conditions.
Based on experience, we would suggest that companies now take a step back and make a conscious choice about their supply chain strategy – do they want to continue to risk stability for lower costs? I firmly believe that this would be unwise.
Focusing on cooperation and strategic partnerships will allow businesses to reap benefits and enhance value creation. Consider taking a partnership approach with suppliers and invest in their development. Sharing knowledge and skills demonstrates your commitment to them and will help them improve, which is a win-win situation.
Many businesses are very conventional in the way that they approach new suppliers, yet within the current climate, it can be cost effective for clients to consider venturing beyond the stereotypical sector supplier.
We have experienced Brexit, covid lockdowns and the war in Ukraine, and it is certain that more economic challenges are on the way. Preparation for these is critical, however, it shouldn’t be too specific. I would suggest keeping it general and focused on relationship building.
To deal with these uncontrollable external challenges, companies are looking harder at their sourcing strategy and thinking about how they can build resilience into their supply chain, and what an acceptable price is to pay for that. Now is the time to look closer to home for forging new and meaningful supplier relationships and we are extremely lucky to have a plethora of talented companies located within NI, Ireland and GB.
If you are working with a challenging supplier who regularly provides sub quality work or misses delivery dates and is unwilling to improve, then review the supplier landscape, and do not be afraid to identify and qualify alternatives. The perceived value must be equal within the relationship and if this is not the case, there are companies willing to invest in the relationship.
Businesses also shouldn’t ignore the advantages to be gained by working locally when it comes to supply chain decarbonisation. By engaging suppliers to create a net-zero supply chain, companies can boost their green credentials, enable emission reduction in hard-to-abate sectors, and accelerate climate action in countries where it would not otherwise be high on the agenda.
No matter the complexity or simplicity of the supply chain, there are always improvements that can be made, be those minimal or substantial changes, that can save your business both time and money.
To find out more about Pinnacle Growth Group, visit: https://pinnaclegrowth.group