In recent years, there has been no shortage of challenges in the field of logistics and, by extension, in the supply chain. From the COVID-19 pandemic that began in 2020, to extreme weather events, war in Eastern Europe and high global inflation, the world has faced events that have disrupted supply chain dynamics and required the development of new practices to achieve excellence.
In this context, strategic supplier management has taken a prominent place and remains a trend for the coming years.
To give an idea of the magnitude of the challenges affecting the supply chain, even automotive phone number list giants such as General Motors have been affected, for example, by the shortage of electronic components.
The problem was most acute between
2020 and 2022, when China, the largest producer of this type of material, insisted on a strict zero-COVID policy, which led to the closure of factories for long periods, complicating the global electronics chain.
The impact was so strong that Chevrolet had to temporarily suspend production of one of the best-selling cars in Brazil, the Onix. It was not until 2024 that the company was able to resume delivery of the model with all standard electronic 3 Ideas to increase sales in a software company components, such as Bluetooth.
This practical example raises the question: is it possible to really prepare for the future without knowing what crises could affect our operation?
Here we have gathered a comprehensive content on how to structure a strategic supplier dating data management that keeps the company always one step ahead. Find out!
What is strategic supplier management?
The concept of supplier management directly refers to finding and maintaining a reliable network of suppliers to keep a business supply chain running. These suppliers can provide inputs or services that a company needs, either for the production of a product or to maintain the company’s operational structure.
This field alone is already extremely strategic, as suppliers who fail to deliver in the required quantity and quality can lead the company to offer low-quality products or even cause the business to come to a standstill, as in the case of the lack of components that Chevrolet faced in Brazil.
Therefore, strategic supplier management goes beyond simply signing a contract for the sale or provision of services. Managing suppliers strategically means taking care of the relationship between the contractor and the supplier, but going further.
Large companies may have a list of suppliers that runs into the hundreds, from various parts of the world. Strategic supplier management is concerned with continuously mapping and analyzing potential logistical, environmental, economic and political disruptions that may affect a supplier, allowing for early action to be taken to prevent loss and damage.
In addition, supplier management also aims to assess the overall situation of supplier companies, seeking to identify the health of their operations and other market movements.
Strategy to reduce risks
Ultimately, strategic supplier management aims to reduce risks to a company’s operation. By strategically analyzing suppliers, a company can select those best suited to meet the demands of the business, benefiting both the operation and the reputation of a brand.
Given the great importance of strategic supplier management, here are three key tips for this area in 2024:
Governance and risk standard
Until a few years ago, price was one of the most important factors (or the most important one) when hiring a supplier. But that reality has changed, as has the purchasing behavior of the end consumer.
This is because the possibility of shortages, a crisis in image and reputation, or irreversible financial losses have become problems with the capacity to profoundly alter a brand.
Having a well-defined standard of supply chain governance has become imperative to reduce risks. This means that once a protocol or action plan is defined, any deviation from it represents a threat to the company’s strategy.
Governance thus becomes a central point of the strategy also in supplier management, a task that must be carried out strictly within established standards.
This can be challenging as it also involves adjustments in organizational culture and buy-in from leaders and different areas within the business, which brings us to the next point.
ESG Management
The acronym ESG is no longer new and is now well known by business management teams. Environment, social impact and governance are terms that must now be part of any company’s vocabulary, as a result of the radical change in consumer behaviour in recent decades.
Having your brand associated with working conditions analogous to slavery, with actions that destroy the environment or that harm people’s lives, are just some examples of what the lack of an ESG policy can do to a brand.
However, it is of no use for a company to have an award-winning ESG policy if its suppliers do not follow the same guidelines. Imagine a food chain that has as a supplier a farm where animals are mistreated before slaughter. The association between the brand and the supplier can have disastrous consequences for reputation and image.
In these cases, it is important for companies to have tools that analyze the ESG behavior of suppliers, standardizing and automating the risk management process.
Resilience
One thing is certain: developments and challenges in the global supply chain will not cease.
Whether due to the global geopolitical landscape, local political, economic or infrastructure issues, or even climate change, it is critical that strategic supplier management sectors remain willing to change and prepared to learn.