Monday, 11 May 2020

Your business may be ready to reopen or ramp up after a pandemic-required lull. But that doesn't mean your vendors and suppliers are ready—or that they will ever reopen.

After the coronavirus outbreak ground production to a halt in China and subsequently, around the world, businesses everywhere watched their supply chains flail—and in some cases disintegrate.

Moving forward, 56 percent of chief financial officers say they will adjust their supply chains by developing alternate sourcing options, according to a PwC survey. Fifty-four percent say they will take steps to better understand the financial and operational health of their suppliers.

Even if your small business doesn't rely on Chinese-made goods, you may need to take a close look at your suppliers and vendors. Some of them may rely on products from regions that have been hit hard by the pandemic, or they may be struggling to stay afloat during or after prolonged periods of business shutdowns.

Start by taking these steps:

Check in with all suppliers

Say your restaurant depends on a craft beer distributor, but all his clients have retooled their breweries to produce hand sanitizer instead of beer for the past month. He may not be able to fill the giant order you were planning to place to gear up for a grand reopening.

Have a conversation with each supplier to find out what they are able to provide and when, so you can better plan for your own reopening.

Consider diversifying your supply chain

If you normally rely on suppliers from a specific region of the world or the country, it may be time to build relationships with backup providers. Even if your regular suppliers in China, Italy, or New York are now back in business, seeking out additional resources can help ensure you'll be prepared for the next crisis.

Look for ways to automate the process

Cloud-based supply chain software programs can alert you when supplies are low in certain locations and suggest alternative vendors. They can also track shipments automatically and help you increase ongoing communication with suppliers so you can better understand their ability—or lack of ability—to meet your needs on your timeline.

Make your business attractive to new suppliers

If you want to build an arsenal of new suppliers that can help you drive your business to new heights, make sure you can be the type of partner those suppliers will want. For instance, if your cash flow is low, you might consider opening a business line of credit or other financing so you can offer cash deposits or pay vendors quickly or in advance for first orders. The ability to get paid quickly is always attractive to a vendor, but especially in uncertain times.

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