The novel coronavirus pandemic is still wreaking havoc on all sorts of processes in the supply chain and beyond, even several months after it first took hold in the U.S. As such, companies have continually been forced to pivot to new suppliers and strategies, and that's a trend that's not expected to reverse course any time soon.
Indeed, according to chief financial officers who responded to a recent PricewaterhouseCoopers survey from a host of major companies, supply chain issues were cited as one of the three largest concerns for 21% of companies. Meanwhile, nearly two-thirds said they were going to try to change the products and services their companies relied upon, and a quarter of respondents said they were shifting their supply chain strategies overall.
No doubt, this will include shifting to a more diversified and broader group of suppliers, and the following reasons show exactly why your company would be wise to do the same:
1) Prepare for any eventuality
As the coronavirus, wildfires, Atlantic hurricane season, military strife abroad and more have all shown in the past several months, you just can't plan for everything these days, according to Thomas. As such, it's critical to be able to quickly tap new suppliers if distribution problems arise, to ensure a smooth situation on your end of the chain. Often, more than one issue persists at the same time, meaning you need to have contingency plans for your contingency plans.
2) Ethics and sustainability
In addition to just being able to avoid problems stemming from natural disasters and COVID-19, you might want to diversify your supply chain simply because more consumers are increasingly concerned with sustainability and ethical consumption, Thomas added. For that reason, you may have to start thinking about ways you can reduce your carbon footprint in the supply chain and otherwise do more to meet consumers' expectations. That can even become a selling point for your company, as long as it's consumer-facing.
3) Keep up with the competition
As that PwC survey showed, other companies are already strategizing for a more diverse supply chain, so you can't allow them to get an edge on you if you can avoid it, according to Supply Chain Digital. Even if the big impetus to do this is just to keep up with everyone else in your space, that's as good a reason as any to put in the time and effort required to find more suppliers that can meet your needs on short notice.
4) Gain more visibility
If you've been in the logistics business for a long time, you may have many old standbys you support because, well, you've long relied on them, just as they've relied on you, Supply Chain Digital said. But those partners might not be as integrated as you need them to be, in terms of providing you all the visibility you require. It's always worth the effort to gain that extra little bit of operational efficiency and insight.