Internationally active SMEs came under severe pressure during the pandemic, and supply chains in particular were affected. But how can SMEs remain fit when it comes to their global activities? One recommendation is geared towards optimizing value chains. And this goes hand-in-hand with supply chain management. Christoph Wilhelm, CEO of Global Sourcing Services, was present as a speaker at the GoGlobal Days, and reveals five tips that are more relevant than ever before, especially in the current situation.
1. Pay attention to smart storage in order to ensure production and delivery capabilities
- If certain articles are difficult to obtain or very long delivery times are common, you should always keep these "bottleneck" articles in stock.
- Align your planning along the entire supply chain. This means you need to define those suppliers for which it makes most sense to keep stock with, for example. You should also think about raw or primary materials and supply chain transparency (see point 4).
2. Define the sourcing strategy that best suits your company
- This is one of the classic aspects of supply chain management, and therefore an important point. Ask yourself this question: Where can I, and do I want to, have multiple supply sources, and where will I deliberately choose single source?
- Multiple sourcing, on the other hand, is usually a very effective risk management tool, but it comes at a cost. Because of this, the central question here is where it pays off to invest more effort.
3. Keep an eye on the geographical diversification of the supplier base
- COVID-19 has shown that a geographically one-sided supplier base can very quickly lead to major supply problems, for example, in the current case, too many suppliers for castings in Northern Italy.
- On the one hand, geographical diversification follows suit with the strategic definition of articles, parts or product groups, for which a company can and wants to operate single or multiple sourcing. On the other hand, the issue relates to the availability of qualified suppliers and a company's ability to successfully develop these suppliers.
4. Keep supply chains transparent
- In principle, this is a simple point, but it's nevertheless extremely important: Who delivers what and to whom? If you are completely clear on this point, you can identify potential delivery or supply risks early on.
- And in a second step, you can coordinate who along the supply chain is most suitable for defining and taking appropriate measures for risk minimization or avoidance.
5. What should you do in critical situations? Be ready for emergencies
- COVID-19 has caught practically the entire world off-guard. What can you do for the future? Practice. Just like the fire department or an aircraft crew does: Run through and plan emergency scenarios, rehearse events so that, in the event of an emergency, basic processes can be ensured and procedures are clearly defined.
What the corona crisis has shown us
COVID-19 has clearly proven that smart warehousing is the most effective option and also the easiest to implement. However, companies need the necessary financial resources to do this. What's more, the pandemic has ruthlessly demonstrated that companies acted carelessly in the areas of supply chain management, purchasing and procurement. Often, a coordinated strategy, internal, inter-departmental understanding, organizational requirements, resources, knowledge and experience, suitable tools and aids were missing. And this needs to change.