COVID-19 laid bare some huge gaps in supply chains worldwide. Late deliveries, products out of stock, and vendors closing their doors for good have become the new normal over the past several months. With no end in sight to the pandemic, companies need to move out of crisis mode and accept the new reality: your procurement strategy needs more attention than ever before.
While you’ve probably gotten over the early COVID-19 logistic hurdles, more may always be lurking just around the corner. Short-term solutions are no longer going to fly: your whole procurement model needs to be whipped into shape. Here’s how you can do it:
- Join a GPO.
Few moves will get you as much mileage here as joining a group purchasing organization. Group purchasing organizations, or GPOs, make procurement a much more stable, reliable process for businesses whose position might be vulnerable otherwise. By leveraging the collective buying power of their members, GPOs can negotiate better deals and plan better distribution patterns as a result.
The biggest benefit of joining a GPO in times like these is the padding it provides against future downturns. To most large vendors, your company is just one small client of many. If you’re part of GPO, however, your needs take greater priority than they would otherwise. With future downturns a serious possibility, having a well-established GPO on your side can make all the difference in an uncertain world.
- Form deeper relationships with vendors.
If you’re looking to boost vendor security, you need to make sure that you and your vendors are on the same page. Forming strong vendor relationships is key for ensuring that you don’t get left behind when the going gets rough. If your account isn’t a top priority, it’s up to you to make it one.
Go beyond a simple contract or distribution agreement: what can your vendor do to set you up for success and vice versa? Perhaps you could provide a discounted rate on one of your key services or set your vendor up with one of your partner companies. Whatever you can do to cement your relationship, you should: the best kind of client to be is an indispensable one.
- Procure locally.
During events like the COVID-19 crisis, long-distance or international supply chains are always the first to get tangled. When you source from a number of different areas, you run the risk of juggling many logistical issues: weather, regional outbreaks, differing laws, and so much more. Local procurement helps circumvent these issues and benefit your regional business ecosystem as well.
Scout for vendors in your area capable of fulfilling your company’s needs. Even if they don’t have all the bells and whistles that you may be used to, local vendors can pose more opportunities for relationship building than national operators ever could. By building up a network of nearby companies to work with, you can withstand even the biggest disruptions during COVID-19 and beyond.
- Train your team.
Few small businesses have fully staffed, fully qualified teams dedicated solely to procurement — even the thought sounds a bit gratuitous. Even so, purchasing is an integral part of any and every business; if you can’t have full-time employees working to optimize your purchasing strategies, you should at least make sure that whoever is in charge of procurement is properly trained.
Whether it’s night courses at a local college or online modules, investing in proper procurement training for your team can go a long way. When the next major crisis strikes, you need to be sure that your company can continue operating as normally as possible — some well-informed team members can go a long way in making that happen.
- Lean into tech.
In 2020, if there’s a problem you can’t solve, there’s probably an application out there that can solve it for you. Procurement technology may sound a bit strange — you’re already getting the products you need, right? The truth is that just because you have a supply chain doesn’t mean that it’s properly optimized for cost and efficiency.
Look for tech tools that fill gaps in your procurement strategy, whether that means identifying new vendors or streamlining distribution scheduling. While no software is going to do it all for you, they can help smooth over some of the procurement rough patches that COVID-19 has shown nearly every business to have.
Investing in procurement now will save you plenty of headaches down the line. While no supply chain can ever be perfectly secure, the harder you work to lock them down the easier they’ll be to manage long after COVID-19 is over.