In March 2020, before the shutdown, I traveled to a few customers and had an opportunity to talk supply chain with some of their commodity managers. Given the centrality of China-based supply chain sourcing, I wondered if pending restrictions on material movement between countries and potential productivity downturns overseas would affect these clients. At the time, the impact was uncertain—many of these companies had placed forward-buys on key commodities, such that they expected to have a bit of a buffer to ride out the ensuing uncertainty. Strategic supplier relationship management proved to be the ideal way to weather 2020 supply chain challenges.
How do supply chains keep up with demands?
During the subsequent months, strange things abounded. On the home front, demand patterns changed drastically, trimming back the need for auxiliaries and tertiaries, leaving much of the stockpiled inventory pushed to a corner, waiting for needs to level off and go back to their old ways. In other markets and verticals, demand for certain products and services had gone through the roof, and companies struggled to realign their supply chains to support the fulfillment of surging demand.
This resulted in a great deal of wheeling and dealing, including searches for alternate suppliers. Local companies took on the manufacturing of components that had long been outsourced. These activities are ongoing for everyone balancing new supplier relationship management trends.
As situations continue to evolve, folks immersed in the supply chain community continue to try and understand just what can be learned from this strange turn of events. One point of interest has to do with the actual dynamics of demand. Strangely enough, it was not the downturn in supply that created the many supply chain challenges, but rather, it was the spiking nature of demand. Product and service demand did not decrease uniformly. Rather, it scraped bottom in certain product categories, markets and verticals, and sky-rocketed in specific niches.
As a supply chain manager, predicting such strange peaks and valleys would be a fool’s errand. Rather, the successes in Epicor SRM that I’ve encountered have had more to do with the ability to rapidly react to challenges than to anticipate them. This ability to react is normally due to a few key capabilities:
- The ability to develop a broad supplier base. This means locating multiple potential sources of supply, in the event that one source of supply goes dark.
- The ability to leverage alternate parts and methods to manufacture high-demand finished goods, in the event that primary components become unavailable.
- A highly capable supplier relationship management toolset that can closely monitor and maintain incoming supply, as to ensure that incoming supply will meet the company’s needs and provide maximum reaction time, in the event that supply will not make it in on time.
SourceDay can assist in this final capability, which is the ability to organize supply in order to ensure that Epicor customers can support the shifting and shifty demand patterns of their own customer base.
Has 2020 changed your supplier relationship management strategy?
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Covid-19’s Impact on Your Supply Chain
On September 17th, 2020