Preserving cash in a crisis, and ensuring your supply chain survives

A new study from The Hackett Group has shown that leading procurement organisations that have comprehensively optimised their technology architecture
Date Posted: 16/04/2020 Category:
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Preserving cash in a crisis, and ensuring your supply chain survives

Date Posted: 16/04/2020 Category:

As we navigate our way through this period of unprecedented economic and personal uncertainty and governments make stringent changes to protect lives across populations,   businesses of all sizes are facing pressing & critical issues on many fronts. These include the need to protect the business and assure viability for the future, support and retain staff, maintain customers,  keep cash and reduce the cost of operations in a volatile and fragile supply market.  

Buying organisations are looking to manage the economics of their own business without further de-stabilising an already vulnerable supply chain.   As buyers look to support the business in preserving cash, stabilising profits,  and maintaining the integrity of the supply chain there is an inherent challenge,  can I reduce my costs significantly and ensure that key suppliers are able to remain viable?  

I’ve always found that in this situation much of the insight and expertise needed to answer both of these agendas is contained within the existing supply chains.  Suppliers at each tier contain a wealth of information about their own market,  and also have an uninterrupted view of buying companies demand, purchasing processes and usage for their products and services.      

Bringing together supplier groups into collaborative units formed around homogenous supply chains or product platforms to attack a common objective can deliver significant results.  Sometimes trading the simplest of ideas will lead to efficiencies that will create real savings,  whilst ensuring that the absolute returns made by suppliers in the chain can be maintained.

This doesn’t need to be a laborious process either.  There are tools available to support this – allowing the sharing of ideas for improving supply efficiency,  optimising demand, reducing wastage and simplifying logistics at each connecting point of the supply chain – without the need to initially do this in open forum.  The results of which can be quickly consolidated, reviewed with the group and actionable items agreed.  

Engaging in this way can secure the short-term financial gains required to weather this storm,  but also put in place dynamics that will ensure businesses exit this period of disruption with supplier relationships that are stronger for the future.

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