The anticipation from senior management that you will know everything about your firm’s supply chain can be a heavy burden. Managing a database of thousands of suppliers can be a real challenge and simply pulling off a report for weekly team meetings isn’t a simple job. To gauge just how much you know about your supply chain and your supply chain compliance, ask yourself these 5 key questions…
1 – Is spend under control?
Do you feel you have enough information available to make an informed decision about your current and future spend strategy? Accurately budgeting for the year is essential for any business – not getting it right in the first instance could lead to a shortfall in funds next year.
2 – What is the impact on all stakeholders when you change a supplier?
Changing a key supplier in search of lower costs or higher quality is a natural occurrence in your industry, but what is the true impact on all stakeholders? Are you disrupting your businesses’ operations to the point that it would be better not to make the change?
3 – What is your annual supplier churn percentage?
Knowing how frequently your suppliers change allows you to make judgements based on the quality of new supplier recruitments, and the relationships you have with them. If you have a high churn, have you ever asked yourself why this is?
4 – What is your long-term strategy?
Focussing just on the here and now means you maintain your supply chain effectively but are you managing it towards a long-term goal of saving money/improving efficiency? If you’ve never considered a long-term strategy, then why not? Completing a full audit and developing a strategy could lead you to know much more about your responsibilities.
5 – Which suppliers have you worked with for the longest?
Do you see this as a good or a bad thing? There are clearly positives and negatives for working with the same suppliers over long periods of time. Whilst relationships and trust grows, so too could cost and the risks liable to your business. Having insight into these details is essential to manage and know your supply chain effectively.
How much do you know?
If you're a Facilities Manager with well-drilled processes in place, answering these 5 questions will be fairly easy to do. If you’re left feeling that you need to know more about your supply chain, download our free guide to Improving Contractor Performance with Compliance here.
Photo credit: Tim Regan