The last twelve months has been a hugely challenging period for the utilities industry. Following the onset of the Covid-19 pandemic, the sector has dealt with unpredictable demand and pressures that would have been unimaginable a mere eighteen months ago, underlining the importance of a resilient supply chain. However, while the initial tumult has died down and recovery has begun, this relative calm is not the time to take focus away from ensuring that your supply chains are as robust and resilient as possible.
Resilience in times of uncertainty is key, and an effective supplier assurance scheme is a valuable asset in maintaining resilient, compliant and ethical supply chains.
Kate Ferrier, Senior Vice President of Customer Engagement and Quality Assurance at Achilles, shares her expertise on what makes a supply chain resilient and how a supplier assurance scheme like Achilles can help:
The Achilles UVDB network currently comprises 60 buyers and 6,500 suppliers, with a recognised utilities qualification system under UK legislation. It supports businesses within the utilities and public sector industries to achieve the highest level of supply chain assurance, helping to save money and improve operating effectiveness. Companies that are part of the UVDB network are assured that their supply chain has been thoroughly audited to industry standards and meets all the required benchmarks.
All these factors help to improve business performance, but what makes a truly resilient supply chain?
Ensure you have a recession strategy in place
When a period of recession is anticipated, it’s important to clearly define both your short and long-term goals. Business critical processes should be prioritised as part of your Business Continuity Management plans. Get rid of any discretionary costs that the business does not need and watch the market and supply chains intently. Cash flow will be the primary concern and businesses should take full advantage of government support while continuing to target longer term strategy and growth opportunities.
Investing in technology should also remain a key priority – automation and workflow tools can enable a business to thrive, even in a recession, increasing productivity and improving consistency while reducing cycle times. Keep an eye on new technology – don’t be left behind.
Draw on the tools at your disposal
Building stronger, more secure and more sustainable supply chains is essential to being able to adapt to a changing world. Procurement teams have an important role to play in making sure that their organisation is prepared to tackle any evolving risks and challenges. To do this effectively, they are going to need a full suite of tailored supply chain risk management tools at their disposal, such as those provided by Achilles.
Utilise supplier insights to understand risk
It’s important to take the time to build relationships with your suppliers. Tools like the Achilles Insights dashboard will provide a comprehensive view of the financial health of your supply chain – along with visibility on any hidden risks. Businesses that can quickly identify any potential pitfalls in their supply chain can make informed, intelligent decisions to mitigate any issues before they impact their business.
Having a risk model that is in line with legal standards and meets the needs of the sector will help to minimise threats and any associated effects.
Guard against risk from the outset
While it’s important to be able to identify risks within the supply chain quickly and efficiently, businesses should be doing everything they can to guard against risk from the outset when appointing new partners. Part of Achilles’ supplier pre-qualification process involves collecting and verifying data relating to financial risk, providing buyers with a more complete and accurate view of the risk profiles of potential suppliers.
Audits are also an important tool to ensure suppliers are as prepared as you are – Achilles conducts a range of audits to help businesses and their suppliers to understand where they may be exposed to risks.
Visibility is key
Visibility and transparency is crucial – businesses cannot manage the unknown. However complex a supply chain may be, understanding potential problems and weaknesses allows a business to prepare adequate contingency plans – an exercise that may mean the difference between success and failure.
Once any sources of supply chain risk have been identified and analysed, appropriate policies should be created, putting a plan in place for a range of issues such as shortages or other supply chain disruptions.
Take the guesswork out of financial risk
Effective financial risk management is impossible without clear supply chain visibility.
Achilles gives buyers the visibility they need to spot potential issues and prevent any costly disruption, damage to supply chain relationships and any subsequent reputational impact.
The data Achilles collects and verifies provides businesses with a full picture. We gather financial data from suppliers, which is verified by an expert team. It simplifies financial risk management and helps businesses to build stronger, more effective and resilient supply chains.
Be proactive in communicating with suppliers
In the event of any risk hot spots being identified, it’s important to be proactive in communicating with the supply chain. At Achilles, we advocate working together with your supply chain to weather a crisis – a strategy that has been particularly important during the Covid-19 crisis. Working closely with suppliers will help to keep cash moving through supply chains and maintain business continuity.
By reaching out to suppliers who may be at medium term risk, businesses can take steps to support them through any issues, limiting any serious or long-term impact on the rest of the supply chain. Adapting to new situations together is the most effective means for the entire supply chain to limit any ill-effects.
Have “Plan B” contingency plans in place
Depending on the crisis at hand, supply may be affected – it’s important to identify additional sources of supply that can be leveraged quickly from a larger base of compliant supplier should your existing supply base be unable to deliver.
Proactively qualifying suppliers is a positive early step businesses can take to mitigate against any disruption.
With rapid advancements in science and vaccine programmes continuing to progress successfully across the globe, it’s likely that the immediate risk to disruption seen in the early stages of the Covid-19 crisis will continue to dissipate.
However, the pandemic shone a spotlight on the importance of having a resilient, well-prepared supply chain equipped with the tools and insight to counter threats – whether short-term disruption to individual suppliers or crises like Covid-19 which had wide-ranging effects on entire global supply chains.
The value of working with a partner like Achilles, with more than 30 years of experience in supply chain risk and performance management, cannot be underestimated. Data and insight is key in building and maintaining a resilient supply chain that is able to weather whatever challenges the future may bring.