Reducing Supply Chain Risk Through Smarter Tender Management

Managing supply chain risk is essential to maintaining stability in business operations, especially in today’s dynamic global market. Smarter tender management can play a pivotal role in reducing these risks by fostering resilience and reliability throughout the supply chain. Here are key strategies to achieve this:

1.????? Preferred Suppliers Only: Prequalify suppliers to ensure they meet the required standards for insurance, indemnification, licences, product availability and financial stability. NB: ensure your system has a simple method for automatically tracking and notifying you and your suppliers about the expiry dates for all the required accreditations.

2.????? Identify Hidden Risks: Off-contract and non-core purchases can have a significant impact as much as your core business purchasing - particularly if there are no insights and controls in place. Having a simple system that manages and tracks all frequent purchasing can provide valuable information when strategic and/or fast decision making is required.

3.????? Diversification of Suppliers: Relying on a single supplier can be risky. By diversifying the supplier base, businesses can mitigate the impact of regional disruptions or a supplier’s failure to deliver.

4.????? Make it Easier to Engage New Potential Suppliers: Ensure your process for onboarding new suppliers is simple and streamlined to avoid over-relying on the same vendors and to be able to seize new opportunities.

5.????? Balance Cost Control with Other Considerations: While controlling costs is vital, so is product or service availability, geographical coverage, upstream impacts on supply and maintaining a healthy competition amongst potential suppliers. This ensures flexibility to switch if your primary choice becomes unavailable or compromised.

6.????? Clear Contractual Agreements: Drafting comprehensive contracts with clear terms and conditions helps manage expectations and reduce legal risks. This also ensures that both parties understand their responsibilities during disruptions and having all these documents easily at hand ensures simple resolutions if needed.

Applying these strategies together helps you create a resilient supply chain ensuring your are capable of adapting to change.

We would love to hear your thoughts on what other factors should be considered and what their potential impact could be?