How to mitigate supply chain risks in times of COVID-19
Tejari, one of the world’s largest independent spend management companies and part of the JAGGAER network, has launched a white paper addressing holistic supplier management, in a bid to support businesses during COVID-19.
The paper, titled Holistic Supplier Management: Orchestrating the procurement function for maximum benefit, addresses the importance of supplier management and the resulting impact on the success of an organisation.
The paper discusses the challenges and opportunities surrounding streamlined operations dependent on the success and robustness of its supplier network, longer supply chains, regulatory frameworks increasing in scope, digitalisation, and diverse supplier ecosystems.
Hossam Refaat, Managing Director, JAGGAER/Tejari MENA, said: “Supplier management is the optimisation of what comes into your company so that you can optimise what goes out.
"It is at the very heart of procurement and managing suppliers effectively to perform in harmony with your business strategy is rather like composing an orchestral piece of music and conducting all the instruments in the orchestra.
“Each supplier brings something different and unique, some play a leading part, some a minor one, some in the foreground, some in the background, but they all have a role to play in the organisations success.”
The paper reveals until recently, many organisations have relied on a combination of Enterprise Resource Planning (ERP) or other transactional systems, the category knowledge of individual procurement managers and staff members, and intuition to manage suppliers, which is no longer feasible in today's market.
Holistic supplier management includes the operational and transactional elements, as well as the ability to identify new suppliers, integrate suppliers into an ecosystem they can fully participate in, assess supplier risk, and make decisions based on that risk.
Finally, as well as complying with internal and external regulatory frameworks, holistic supplier management also promotes sensible decision making on the discovery of new suppliers to be ready to replace under-performing suppliers if necessary.
COVID-19 has highlighted the fact supply shortages can happen, and that unfortunately many suppliers will not recover financially.
This underscores the importance of a holistic overview of suppliers, the supply chain, and the ability to adjust and adapt to new market conditions while ultimately further underscoring the increased importance placed on procurement.
With the addition of smart procurement technology, organisations can make informed strategic decisions about which suppliers best support the organisations' goals and visibility into their performance with real-time data and analysis.
Organizations implementing this technology can manage suppliers strategically and effectively, by understanding their cost structure, strengths and weaknesses, their performance, and how they add value to negotiate better contracts and generate long-term savings.
Rafaat concludes: “Organisations undertaking these necessary protocols will be those that navigate the current COVID-19 pandemic more easily and gain the competitive advantage moving forward,”
Download a copy of the white paper here.