In the first half of 2023, supply chain shortages have continued to be a pressing issue. Initially sparked by the pandemic, these shortages have been perpetuated by various factors, such as geopolitical conflicts and disruptions in shipping, creating significant challenges for many industries, particularly manufacturing. Additionally, specific commodities like copper, nickel, and adhesives will pose considerable problems for supply chains in the coming months. While it’s clear that we can’t fully overcome complex factors causing these shortages, such as wars, epidemics, and natural disasters, some strategies can be implemented to minimize their impact.

Understand where you are right now through data.

First, let’s look at the data. As a procurement officer, one’s initial focus should be understanding the entire supply chain, identifying potential vulnerabilities, and creating clear fallback plans. This is where data comes into play. A comprehensive supply chain understanding based on accurate and timely data is the cornerstone of resilient procurement strategies.

Ideally, any digitally mature procurement function team member should have access to snapshots of internal data (spend analytics, supplier insights, pricing data, and so on) and external data sources that can easily be ingested into internal systems.

Develop your network of second (and even third) suppliers.

One of the most powerful ways to mitigate supply chain disruptions is having alternative sourcing strategies. This involves maintaining solid relationships with existing suppliers while also exploring secondary suppliers. A good relationship with suppliers involves consistent communication, sharing relevant information such as current inventory levels, and managing early deliveries to prevent excess inventory.

Don’t over-focus on cost-cutting.

Lastly, avoiding an overemphasis on cost reduction can have substantial benefits. While it may seem counter-intuitive, focusing too much on cost-cutting can lead to longer lead times, compromised product quality, and strained supplier relationships. Balancing cost management with strategic investments in supply chain resilience can lead to more sustainable outcomes.

Look into untapped opportunities.

Looking at the market’s hidden excess capacities is another worthwhile strategy. This involves investigating opportunities with global suppliers with free capacities and might even provide alternative raw materials. By broadening the scope of potential suppliers, procurement officers can tap into capacities that may have been overlooked.

Key takeaways.

In conclusion, while the factors causing supply chain shortages often lie beyond our control, we can still take steps to mitigate their impact. The key is in the data – understanding our supply chains, identifying vulnerabilities, and implementing fallback strategies. By establishing solid relationships with suppliers, exploring hidden market capacities, and balancing cost management with strategic resilience-building, we can navigate these challenging times with greater certainty and success. As we move forward into the latter half of 2023, these strategies will remain essential in maintaining robust and resilient supply chains.

Let’s transform the way you discover new suppliers.

Implementing all the practices mentioned in this article can represent a significant burden for any procurement team, but we can make your initiative easier, at least from a data standpoint. At Veridion, we’ve built data solutions that can give you access to insights on over 50 million suppliers, from detailed product information to certifications and capabilities.

Watch the following demo to discover how our search API can help you in any supplier discovery scenario.

Contact us to discuss how your procurement team can leverage Veridion’s data.