Rising prices, tariffs, and the threat of unexpected disruptions like extreme weather or cyberattacks mean that organizations are turning to their Procurement teams for solutions. Even laggards know they need to work to mitigate price increases and supply chain risks. True Procurement leaders, however, are taking a more proactive approach to constructing and maintaining a more resilient supply chain.
Michael Croasdale, a recognized expert in MRO Strategic Sourcing, joins the Source One Podcast to discuss some of the sourcing and supplier relationship management best practices these supply chain leaders are employing.
Recent developments, Croasdale suggests, mean maintaining a resilient supply chain is more essential (and more challenging) than at any point in recent memory. Using this year's steel tariffs as a jumping off point, he emphasizes the importance of identifying your organization's most critical components. Croasdale reminds listeners that disruptions to the flow of these components and their raw materials could have exceedingly negative effects on both revenue and daily operations.
Organizations that haven't already identified secondary and tertiary sources for these components can't afford to wait much longer. If a company is particular vulnerable to tariffs, they should cast a wide net and look into options both foreign and domestic. Throughout this process, Croasdale says, it's particularly important that Procurement ensure alternate sources are both stable and dependable.
This will mean doing some extra due diligence. Croasdale suggests tailoring RFI questionnaires to place a particular emphasis on stability. Supplementing these efforts with consistent audits, site visits, and product testing can guarantee additional security in these new supplier relationships.
What are the laggards doing all this time? Though they certainly have an idea of what they're up against, Croasdale isn't optimistic that they'll thrive amid all this uncertainty. "Worst case scenario," he says, "they won't be able to source their critical components at all. Suffering significant disruptions, they could find themselves struggling to survive let alone maintain an efficient, resilient supply chain."
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