How do you mitigate the impact of supplier disruptions on your business continuity?

Some things I have found helpful Post-Covid: considering a supplier’s geographic location and potential disruptions due to travel restrictions, regulations, sanctions, or other factors is imperative. Furthermore, you need to review your suppliers’ financial health, as those with weaker finances are more likely to suffer when economic conditions are not favourable. Assessing their liquidity levels and ability to meet commitments over time can help you identify the most vulnerable. It is essential to keep track of the supplier’s performance over time by measuring quality, delivery lead times, and responsiveness. This will help you determine which suppliers can meet your standards and objectives long-term consistently.

In my experience, supplier disruptions require a proactive approach: 1) Diversification: Multiple suppliers for critical items reduce reliance on a single source. 2) Supplier Risk Assessment: Identify and mitigate potential risks with key suppliers. 3) Inventory Management: Maintain buffer stock for essential materials to weather disruptions. 4) Contractual Agreements: Include clauses addressing supply continuity and potential disruptions. 5) Communication & Collaboration: Maintain open communication with suppliers to anticipate and address issues early. By taking these steps, you can minimize the impact of supplier disruptions and ensure business continuity.

Once you identify the critical suppliers, let the supplier know they are critical. Critical suppliers control your success as much as employees. The score card and communication needs to be clear. Expectations should be evaluated quarterly or more frequently if needed. That supplier is part of your team. They need the forecast to manage their business to support your business. The communication is always two way.

In the simplest of terms, it involves segmenting your suppliers, defining the metrics needed to manage the relationship and establishing a program for engaging regularly to drive better results. KPI’s are focused across three holistic areas. 1. Performance (Cost, Quality, Process, Relationship, Benefits: Budgetary, Project Timeline, Response Time). 2. Risk & Compliance: measured in accordance with established guidelines, policies, specifications or legislation, i.e. Financial, Supply, Contract, Relationship, Savings, P2P Channels, Regulatory, Reputation Ratings 3. Innovation: Transformative Technology, Sustainable Solutions, Revenue Generation, New Business Models, Process Improvements, Cost Reduction & Identifying Unmet Needs.

Identifying critical suppliers is essential for supply chain resilience. Evaluate suppliers based on volume, value, quality, lead time, and availability to prioritize key partners. Strategic relationships with critical suppliers ensure uninterrupted production, customer satisfaction, and business continuity.

During the COVID era, film/series production faced unprecedented disruptions. Production halts severely impacted studios, with our shows like 'Stranger Things' S4 experiencing delays and our vendors suffering financial strains. This was compounded by rising inflation and shooting costs, leading to heightened supplier risk. I updated our strategic sourcing approach by developing dynamic metrics to track vendors' financial and operational health, identifying backup suppliers, and revising rates with current vendors. We collaborated closely with all partners and used innovative shifts, such as adopting Virtual Production, indoor LED panels, Unreal Engine, etc to create shooting locations virtually, ensuring safer and more efficient production.

In my experience, effective supplier assessment hinges on two pillars: 1) Performance Monitoring: Track key metrics like on-time delivery, quality control, and cost to identify areas for improvement. 2) Risk Assessment: Evaluate financial stability, past performance, and compliance to mitigate potential issues. By combining these, you gain a holistic view of supplier strengths and weaknesses, ensuring a reliable and efficient supply chain.

Regularly assess supplier performance using both quantitative (on-time delivery, quality control, cost performance) and qualitative data (supplier communication, industry reputation, risk assessment) to identify potential issues and ensure a resilient supply chain.

Para avaliar e monitorar fornecedores críticos, utilize ferramentas como scorecards, auditorias e pesquisas. Indicadores como saúde financeira e desempenho de entrega s?o essenciais para acompanhar o risco e desempenho ao longo do tempo.

Whether formal or informal, assessing supplier performance is an ongoing exercise. Formal scorecards and midyear/end-of-year reviews are processes that you can put in place to manage supplier relationships and promise feedback. The real challenge lies in monitoring supplier performance and risk CONSISTENTLY! While we cannot control everything, we can check in with business partners, check in with suppliers, review contracts, spend, timelines, etc. to ensure that expectations are being met. Setting aside time to do this on a monthly or quarterly basis can keep surprises at bay.

In my experience, strong contingency plans require: 1) Identify Risks: Brainstorm potential disruptions that could impact your business. 2) Prioritize Threats: Analyze the likelihood and severity of each risk to focus on the biggest threats. 3) Develop Strategies: Create clear action plans for mitigating or responding to each prioritized risk. 4) Assign Roles: Designate clear roles and responsibilities for carrying out the contingency plans. 5) Test & Refine: Regularly test your plans and update them based on lessons learned or changing circumstances. By following these steps, you can create and implement effective contingency plans to ensure your business is prepared for unexpected events.

To mitigate the impact of supplier disruptions on business continuity, developing and implementing contingency plans based on risk assessments is crucial. This includes using scenarios, simulations, and exercises to test plans and identify potential solutions. Strategies like diversification, substitution, localization, and collaboration help reduce dependence on single or high-risk suppliers. By preparing for various types of disruptions—such as supply chain interruptions, demand fluctuations, or operational challenges—companies can enhance their resilience, ensure continuous operations, and maintain supply chain stability even in the face of unforeseen events.

Desenvolver planos de contingência para fornecedores críticos é crucial. Use cenários e simula??es para testar e aprimorar esses planos. Estratégias como diversifica??o e colabora??o podem reduzir riscos e garantir a continuidade dos negócios.

To safeguard against potential disruptions caused by critical suppliers, developing and implementing contingency plans is essential. These plans serve as a roadmap to mitigate risks and ensure business continuity in the event of supplier failures or disruptions. Key Considerations: ? Risk Assessment: Prioritize contingency planning for suppliers with the highest risk and potential impact on your business operations. ? Alternative Sourcing: Identify alternative suppliers who can provide similar products or services in case of a primary supplier disruption. ? Communication and Collaboration: Establish clear communication channels with critical suppliers and alternative partners to facilitate rapid response in case of disruptions.

Create a contingency plan for supply chain emergencies. This includes preparing backup-supplier arrangements, geographically restructuring supply lines, and increasing inventory levels

In my experience, strong supplier relationships require clear communication and collaboration: 1) Set Clear Expectations: Define communication channels, reporting requirements, and performance metrics. 2) Open & Transparent Communication: Encourage honest dialogue and share relevant information to foster trust. 3) Regular Communication: Schedule meetings, calls, or use collaboration tools for ongoing communication. 4) Feedback & Improvement: Actively seek and share feedback to improve processes and address challenges. By establishing clear expectations and fostering open communication, you build strong supplier relationships that benefit your entire supply chain.

Comunica??o e colabora??o eficazes com fornecedores s?o essenciais, especialmente durante crises. Use plataformas e protocolos para compartilhar informa??es e expectativas. Contratos e incentivos alinham interesses, promovendo transparência e parceria para responder rapidamente a interrup??es.

Effective communication with suppliers is not just about managing crises—it's a strategic tool that can yield significant competitive advantages. By establishing clear communication protocols and leveraging technology platforms for real-time information exchange, companies can foster a collaborative environment that extends beyond transactional relationships. This approach not only mitigates risks but also encourages suppliers to become invested in the success of the company, often leading to innovation and improved operations efficiency.

This is key. In an inflationary environment, collaborative problem solving could help to lower costs. Gaining few bps on unit price is no longer a sustainable solution

Communication & collaboration with the supplier don't mean much if you - the CUSTOMER - are not considered a priority partner. Relationship development - or partnership development - is critical. Real-time monitoring may not save you in a crisis if the supplier diverts parts or resources to "preferred" clients. To build this, senior leadership must be engaged - not just buyers. Ideally, leadership engagement should include the senior purchasing team, but in truly critical areas, the President/CEO should be engaged speaking to the same level within the supplier. Discussions must be aligned to the level of partnership each wants to attain, and regular communication must occur to ensure the partnership is meeting expectations for both.

In my experience, a strong sourcing review goes beyond cost: 1) Analyze Market Trends: Identify shifts in supplier landscape, new technologies, and sustainability considerations. 2) Supplier Performance: Evaluate reliability, quality control, and responsiveness to identify areas for improvement. 3) Total Cost of Ownership (TCO): Consider factors beyond price, including logistics, payment terms, and potential risks. 4) Innovation & Collaboration: Look for suppliers open to innovation and collaboration for mutual benefit. By considering these aspects, you can refine your sourcing strategy to optimize costs, mitigate risks, and drive long-term value.

An effective sourcing strategy is not static; it requires continuous review and improvement to adapt to evolving market conditions, supplier performance, and stakeholder expectations. Regularly evaluate your sourcing strategy, drawing insights from experiences with supplier disruptions and industry trends. Key Considerations: ? Supplier Performance ? Emerging Technologies: Explore new technologies that can enhance sourcing efficiency, such as AI-powered supplier evaluation tools and blockchain-based supply chain traceability solutions. ? Market Trends: Stay abreast of market trends, including new regulations, supply chain disruptions, and emerging industries, to adapt your sourcing strategy accordingly.

Revisar e aprimorar continuamente a estratégia de sourcing é crucial para a adapta??o às interrup??es dos fornecedores. Use métricas, benchmarks e feedback para identificar oportunidades de melhoria e garantir a continuidade e competitividade dos negócios.

This is listed as the last step, but this should be the FIRST STEP. A strong supply strategy is aligned with a proactive business strategy in the firm. The sourcing strategy should be a collaborative, cross-functionally driven process that happens organically within the entire business. If the sourcing team is creating this in a vacuum, it is a recipe for disaster. A well-aligned team will be able to see the supply chain and contribute to the other steps, providing insight and assistance in building strong plans. Insights can also lead to a more robust strategy that may include developing alternatives that deliver value in other areas like quality and cost.

In my experience, we shall consider the following as well; 1) Supplier Communication: Maintain open communication with suppliers to understand potential issues and develop contingency plans. 2) Collaboration & Innovation: Work with suppliers to find creative solutions and explore alternative materials or production methods. 3) Supplier Risk Assessment: Regularly evaluate your suppliers' risk profile to identify potential weaknesses and vulnerabilities. By implementing these strategies, you can build supply chain resilience and minimize the impact of disruptions on your business continuity.

You must assess the cost benefits of provisioning for contingencies and building safeguards. In a business with low margins and high price sensitivity of customers, there may be an implicit practice across the industry to pass all of the risk of supply chain disruption on to the customer. This was observed recently in petrol station forecourts, when delays in supply led to shortages across the board. Provisioning for contingencies (say, by way of preferential agreements) can often mean that whilst you will be in business when other competitors are failing, you will be operating on suboptimal profits and revenues at all other times.

On my view, Diversifying supplier base for critical items, maintaining strong supplier relationship are plays crucial role for mitigaring risks associated with supplier disruption. while maintaining above, additionally effective inventory management (i.e. safety stock) and continuously exploring new suppliers are important factors to consider for managing these risks effectively.