Whatever the cause, agile organisations can better adapt when disruption hits.
No company is immune to disruption. Whether it’s coming from a nimble competitor disrupting your business model, a new technology making an older one obsolete, or a global pandemic sending businesses into a tailspin, one thing is clear, disruption has become the status quo.
To prepare for disruption, businesses need to be able to shift at a moment’s notice. An organisations’ procurement functions will be in the spotlight to manage complexities and mitigate the risks caused by this new reality. More broadly, increased uncertainty from trade-wars, bushfires, pandemics or more, means the industry must re-think processes, technology and partner relationships to stay focused on driving business outcomes.
Mitigate supply chain risks
Long before the coronavirus pandemic struck, those of us who’ve spent our professional lives in the supply chain and procurement business were loud advocates for the need to be prepared for disruptive events. For some time, the industry has been trending toward the need for visibility into extended supply chains, the importance of constantly evaluating risks, and – should those risks come to fruition – how to mitigate disruption by navigating quick changes. The pandemic has accelerated this trend, and a shift from “just-in-time” supply chains, towards “just-in-case” models that instil greater resilience.
While there is and has always been a constant need to ensure robust risk mitigation strategies are in place, many businesses are now realising it has never been more necessary. A company that cannot pivot in times of change is a company at risk.
Building a risk-averse culture
Being risk-averse means always remembering that connections can be disconnected at any moment, and without notice. Companies must therefore have the resources and technologies to pivot in near real-time.
This means ensuring constant and accurate visibility into supply chains and business ecosystems to detect potential risks or exposures to all types of spend – direct, indirect, workforce, maintenance, repair and services. New technologies from artificial intelligence (AI) to machine learning (ML) and predictive analytics can enable this, with real-time monitoring and alerts to potential risk factors before they happen.
Once a risk is identified, companies can then turn to a network of alternative suppliers to swiftly make decisions and changes before supply chain operations are slowed or impacted.
Amidst the coronavirus pandemic, many businesses have experienced firsthand the devastation when supply chains are not adequately prepared to adapt. The disruption has revealed just how reliant many industries are on extended supply chains in foreign countries and corporations. The scramble by countries, including Australia, to manufacture personal protective equipment and source critical products like hand sanitiser highlighted our vulnerability.
Re-think everything to eliminate inefficiencies
The current business climate has no patience for bureaucratic silos or processes that slow down operations and decision making. To avoid these pitfalls, supply chain and procurement professionals need to automate manual processes, eliminate redundant barriers and adopt a data-driven mindset that enables them to monitor changes in their business environment in real-time.
A first step is breaking down silos to create a full, holistic view of spend and supplier relationships. Australian agricultural chemical company, NuFarm, is one example of how a company is using technology to breakdown these silos and streamline procurement across its global operations, providing it with greater visibility into its spend management. By having a holistic view of its spend and supplier relationships, staff are able to derive intelligent insights and focus on key business issues.
As we navigate this pandemic, businesses must be fluid and agile. When we come out on the other side of this, it will be important to retain this mindset. A business can’t operate in crisis mode all the time, but they can adopt this mindset into how they run a business.
Unlock the power of community intelligence
Never in our professional lives has it been more critical to live the mantra that you simply cannot go it alone. We are all connected and dependent on each other’s success – buyers do not succeed without their suppliers and vice versa. We rely on the ecosystems outside our own walls. Supplier relationships and business partnerships mean more now than ever, as does collaboration.
We need to increase collaboration with all trading partners, enabling opportunities for meaningful engagements and thoughtful conversations to ensure expectations are aligned. By increasing real-time visibility and collaboration throughout the supply chain, we build off each other’s successes. Data, insights and collective knowledge can be shared to make more intelligent decisions for the greater good.
Now is the time to be bold. We can’t simply ride out the storm and then wait for the next big change. As leaders in our profession, we must be the change-makers, the architects and the innovators to adapt and lead in this new reality.
It starts with always being prepared and breaking down barriers, requires using new technologies, and ends with collaboration. In doing so, we don’t just have to weather the next disruption – we can lead the way through it.