While putting out fires isn’t a new phenomenon in supply chain, the last 18 months have been an endless exercise in perseverance. Supply chains everywhere have been rattled—between nationwide shutdowns, factory closures, forced quarantines, and a sharp jolt in consumer expectations incongruously paired with cargo delays. The disruption continues while shortages hamper product distribution for companies across industries, including tech giants like Apple with no shortage of consumer demand.
The perfect storm combining an on-demand digital age and the most devastating health epidemic in modern history have forced supply chain leaders to go beyond putting out the fires to dancing through them. Setting up a supply chain from launch to scale looks different, and as we learned over the last 18 months, there is sometimes inevitable fallout businesses cannot prepare for in advance. But there are ways to build greater supply chain resilience, even in these unprecedented times when production, trade, and suppliers are flying in the often tumultuous mix. Whether you’re at scale or your supply chain is in its infancy, contingency planning can make or break your business.
Recently, we talked about the twists and turns in scaling your supply chain with CEO and Founder of Simms Fishing, Ben Christensen, and CEO and Founder of Doris Day, Justin Seidenfeld to identify pandemic-proof best practices. This blog explores five musts to navigating whatever comes next by igniting deeper value in your partnerships and taking planning to the next level.
1. Never stop networking.
Finding suppliers to support businesses was already a challenge. Now, Covid outbreaks and peaks spurred by variants are forcing new industry limitations on supply chain leaders. It’s tougher to pin down suppliers who meet all your business criteria — cost and quality — without the ability to go onsite and see the factory first-hand.
Constantly networking and exploring new opportunities and alternatives is critical to prepare your organization for when things change. Because they will. Organizations exploring options of moving supply chains for more stable alternatives that were vetted previously are prime examples.
2. Lean on your partnerships and make them last.
As supply chains came to an abrupt halt last year, supply chain leaders had to find new paths from production to their customers. The intel coming out of existing suppliers was a significant buffer for many of them. Justin Seidenfeld recalls the crucial role of “leaning on partnerships and shoring up stronger partnerships together—both on the brand side and manufacturing.” Suppliers were able to give references to brands in ancillary categories—removed by one small degree of separation. These references built on existing business relationships are invaluable.
If your business has been dedicated to building long-term partnerships, that investment has unleashed a powerful competitive edge throughout the pandemic. Having long-term trust-based relationships has enabled supply chain leaders to use the Covid crisis as an opportunity to support and benefit from these partnerships.
“We didn’t cancel any purchase orders. We stuck by our suppliers,” recalls Ben Christensen. “We wanted them to know we were doing that, so we got credit for it as well. Having partners that are willing to work with you to navigate a crisis is critical because you have a level of priority that only comes with the quality of the relationship.”
3. Identify redundancies to build contingencies.
Having multiple vendors that can perform the same function with comparable quality has become a potent business advantage. Because supply chains are constantly in disruption, it’s important for supply chain leaders to have vetted, viable alternatives. When you must make a quick pivot it’s game-changing if you already have an active vendor in place to take that product and run with it.
Supplier diversification is a powerful tool to increasing supply chain agility and resilience. Pinpointing and vetting suppliers for every aspect of the supply chain across different regions can empower a robust network of proven backup options in the event of a local crisis at your mainstays.
While it’s more impossible than ever to predict the future, it’s also more critical than ever to prepare for it. Identify emerging constraints and bottlenecks, doing what you can now to support where your organization will be in three years. Address these issues now. It’s challenging to be thoughtful and deliberate in supply chain when you’re reactive.
If you’re having a tough time flagging viable alternatives, Christensen recommends scoping out other brands making similar products and referencing their import records to identify relevant and proven suppliers upfront. Supply chain used to be built on trade secrets. Now, it’s transparent — you can see where products are being manufactured and get a sense for viable suppliers.
4. Go direct whenever possible.
There are some circumstances when trading companies can be helpful when a trading provider can provide scale and factory access. Trading companies have broad access to a powerful network of partners, they have the scale. With caution around tariff-fee structuring and boots on the ground to see the operating centers in action, they can be helpful for organizations that are still scaling.
“Trade companies are great for a team that’s stretched thin or just doesn’t have the resources,” says Seidenfeld. “Trading companies can provide infrastructure on the ground, in-country development horsepower, local material sourcing, onsite quality inspectors, and help with freight and logistics. ”
“Whenever we do work with one we visit the operating centers ourselves where they’ll be making our product instead of taking their word for it,” he cautions. “We want to see those.”
However, having deeper visibility that comes with a business relationship along with direct lines of communication into your factory partner is beneficial and generally preferable. Christensen explains that lack of visibility and direct communication can snowball into huge business challenges.
“It’s important to have a direct line of communication and a direct line of sight into what’s going on with the actual partner producing your finished goods,” he explains. “Setting up those direct lines is baked into how we operate, and it is so critical for the long-term success of your business relationship.”
5. Have a clear vision, and plan.
Transparency is key to scaling your business and supply chain. Distill as clear of a vision you can as early on as possible to fuel desired output — sooner. You need a clear picture of what you want to make and how. Seidenfeld recommends setting project guardrails and parameters at the onset for business requirements. Having a methodical list and plan of attack is key. Create clear product requirements documents from product features to marketing requirements and cost.
2D and 3D modeling in the design and development process can promote more accuracy and a smoother launch. Researching the product landscape for similar offerings as a reference point with perimeters to draw from can empower a product plan that’s achievable out of the gate. Developing technology-based solutions mandates a living, breathing product brief laser-focused on the solution. For lifestyle and nontechnical products, do your user research. Who you’re creating the product for is going to be the major guiding factor that ignites more intention and detail in product planning at every stage.
That plan extends to suppliers and partners across every node of your chain. Having a variety of supplier prompts across verticals and manufacturing processes can help you build a detailed plan and compare your options. Running through the list of product requirement prompts and qualifiers cultivates a stronger understanding of what suppliers are using and if they can support your product vision. Who you’re creating the product for is going to be the major guiding factor that ignites more intention and detail in product planning.
A Better Way to Manage Your Supply Chain — Get Out of Reaction Mode
Smarter contingency planning can support your business in scaling — faster. Go deeper with more insights — watch the full recording for more best practices and tips for a competitive edge.
