{"id":3538,"date":"2020-10-01T13:25:53","date_gmt":"2020-10-01T13:25:53","guid":{"rendered":"http:\/\/www.rtgsolutionsgroup.com\/?p=3538"},"modified":"2020-10-07T21:49:49","modified_gmt":"2020-10-07T21:49:49","slug":"4-procurement-and-supply-chain-management-trends-in-the-covid-era","status":"publish","type":"post","link":"https:\/\/www.rtgsolutionsgroup.com\/4-procurement-and-supply-chain-management-trends-in-the-covid-era\/","title":{"rendered":"4 Procurement and Supply Chain Management Trends in the COVID Era"},"content":{"rendered":"
[vc_row][vc_column width=”3\/4″][vc_single_image image=”3557″ img_size=”1110×500″][vc_column_text]The post-COVID business world looks radically different from the pre-pandemic economy. Most of the world\u2019s enterprises\u2013regardless of size\u2013suffered from major dips in demand. In fact, in the U.S. accommodation and food services industry, 83.5% of businesses felt a <\/span>negative impact from the pandemic<\/span><\/a>.\u00a0<\/span><\/p>\n

Establishments shut down. Regulations ramped up. Unemployment skyrocketed. Trade with China screeched to a near halt. <\/span>Global supply chains<\/span><\/a> were fractured. And consumers were locked at home. In just a few weeks, the global economy was turned on its head.\u00a0<\/span><\/p>\n

With its widespread impact, coronavirus taught business leaders some tough lessons. In particular, companies have been forced to reinvent their supply chain and procurement techniques.\u00a0<\/span><\/p>\n

What is interesting about COVID-era procurement and supply chain trends is that most of them are not new. In fact, procurement specialists have urged companies to enact some of these changes for decades now!\u00a0<\/span><\/p>\n

That\u2019s right. Forward-thinking procurement experts saw the writing on the wall years ago. The problem is companies have been slow to adapt. That is, until a global pandemic and global <\/span>supply chain disruptions <\/span><\/a>gave them no choice.\u00a0\u00a0<\/span><\/p>\n

As companies fight to survive the COVID-19 recession, they\u2019ve finally jumped on these business project procurement changes:\u00a0<\/span><\/p>\n

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    1. Diversifying sources<\/strong><\/span><\/li>\n
    2. Risk mitigation\u00a0<\/strong><\/span><\/li>\n
    3. Going digital\u00a0<\/strong><\/span><\/li>\n
    4. Safety over cost-savings\u00a0<\/strong><\/span><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

      In this article, we\u2019ll cover these 5 supply chain management trends.<\/span>[\/vc_column_text][vc_custom_heading text=”1. Diversifying Resources” font_container=”tag:h3|text_align:left” use_theme_fonts=”yes”][vc_single_image image=”3559″ img_size=”1110×500″][vc_column_text]Prior to the pandemic, many businesses were single-source for most materials. This means that they used only one source for any given material or product. In some cases, businesses would use a single source for multiple inputs. Due to COVID-19, this is changing fast.\u00a0<\/span><\/p>\n

      Forward-looking procurement advisors like RTG Solutions Group have long warned about the risks of single-sourcing. Even without a global pandemic and an escalating trade war between the U.S. and China, single-sourcing is a dicey practice.\u00a0<\/span><\/p>\n

      The pandemic showed just how dangerous it is to use a single source. Without a backup source, a political, economic, or social event across the globe can dry up your resources overnight. Then, your options are to find a new source as fast as possible or completely halt operations. Needless to say, both options are terrible for business. And many companies found themselves in this predicament as COVID-19 unfolded.<\/span><\/p>\n

      Now, organizations see the benefits of diversifying their sources. This means not only having multiple sources for the same resource, but also spacing them out geographically. Diversifying and dispersing your sources ensures that you have back-up plans in case one of your sources faces an internal or regional problem.\u00a0<\/span>[\/vc_column_text][vc_custom_heading text=”2. Risk Mitigation” font_container=”tag:h3|text_align:left” use_theme_fonts=”yes”][vc_column_text]Risk mitigation has been around forever. Technically, every item on this list is a form of risk reduction. However, risk mitigation as a formal operation has become popular due to the pandemic. More and more, organizations are implementing comprehensive risk mitigating policies in <\/span>procurement<\/span><\/a>.\u00a0<\/span><\/p>\n

      Why? COVID-19 showed companies that short-term cost savings (for example, using a single source because it\u2019s cheaper) could leave them with a hefty bill in times of crisis.\u00a0<\/span><\/p>\n

      Like other items on this list, <\/span>risk management<\/span><\/a> is a strategy that supply chain pros have encouraged for years. Companies have been slow to adopt it because it is not an instant gratification investment.\u00a0<\/span><\/p>\n

      It\u2019s a little like getting your flu shot. You probably won\u2019t feel a change in your body the next day. But come flu season, when everybody is sick except for you, you\u2019ll be thankful you invested in preventive medicine.\u00a0<\/span><\/p>\n

      Risk mitigation does the same for businesses. You won\u2019t feel a change the next day. But, over time, problems will become less and less common. And when a major catastrophe sweeps the entire globe, your business will fare better than companies without risk mitigation plans.\u00a0<\/span><\/p>\n

      So what does risk mitigation look like in procurement? Well, that varies from company to company. A good place to start is to assemble a risk mitigation team led by a risk reduction specialist.\u00a0<\/span><\/p>\n

      First, your team should do a deep-dive into your supply chain to find vulnerabilities. Brainstorm every possible thing that could go wrong at each junction of the supply chain. From there, come up with a back-up, and a back-up to your back-up plan for every scenario. Finally, implement those changes.<\/span><\/p>\n

      Want to learn about a super underrated risk mitigation strategy? Check out our article, <\/span>The Importance of Business Process Documentation in Times of Crisis<\/span><\/a>!\u00a0<\/span>[\/vc_column_text][vc_custom_heading text=”3. Going digital” font_container=”tag:h3|text_align:left” use_theme_fonts=”yes”][vc_single_image image=”3560″ img_size=”1110×500″][vc_column_text]This is yet another pre-existing procurement trend that was accelerated by the pandemic. Like any other industry, the procurement world has a wealth of tech tools at its disposal nowadays.\u00a0<\/span><\/p>\n

      Enterprise Resource Planning, Internet of Things, RFID tags, Inventory Management Systems. These are just a few time-saving digital tools that are quickly transforming supply chains. They can help you:\u00a0<\/span><\/p>\n