Emergency Procurement & Risk Management Pulse Blog With every challenge comes opportunity, and the 2020 pandemic is no exception.  Pulse is here to help with some short-term and long-term strategies for navigating the recovery process and beyond.


The Short-Term
For the short term, let’s say the rest of 2020, here are some steps to get you started on the road to recovery.

Diversify your supply chains

The COVID-19 pandemic has shown the supply chain industry that robustness, does not always equal resiliency. The initial bottleneck created by an outbreak in China, where so many products are manufactured, showed the risks of overreliance on supply chains originating in a single area. Moving forward, if a supplier could be viewed as significantly at-risk, invest in qualifying a second source, or shorten the distance of your chain. This piece from Supply Chain Management Review posits that the future of supply chains is regionalization and localization.

Build a buffer

Once you have secured a supplier for critical products, you should look to build up a buffer stock.  This can protect you from an unforeseen surge in demand, or a breakdown of your supply chain. Ensure your emergency inventory is within reach and outside of areas and logistical hubs likely to be negatively impacted. For more about buffering, check out this article.

Create a tool

Design emergency framework agreements (EFAs) for secondary and alternative suppliers. These short-form contract templates should be for important supplies and services most likely to be disrupted. They can be used to quickly employ suppliers who are not already under contract. For more tips on the use of framework agreements, check out this piece from the World Bank.

The Long-Term
These long-term steps represent transformational strategies that will help you address the complexities of modern procurement and push through future challenges.

Map your supply chains

Charting the course of products from the raw materials used for the component parts, to the delivery of the completed product to the end user provides insights into areas of potential risk. This information can allow you to effectively respond to potential problems caused by events like natural disasters, political upheaval, and environmental or labor practices issues. This Pulse piece provides an overview of the process.

Monitor the risks

The availability of materials, labor, and logistics can be adversely affected by a myriad of events, so keep an eye out for ones that could disrupt crucial supply chains.  A robust monitoring program is like a crystal ball that allows you to foresee disruptions by identifying influential events in the locations on your map.

Start the digital transformation

Strategies like supply chain mapping and risk monitoring are only part of the new digital procurement. Systems that collect and analyze data like spend, supplier and product performance, inventory, and usage rates are effective tools for forecasting, comprehensive planning, and strategic procurement. The increased use of technology can cut down on waste and lower overhead costs.  Digital procurement’s transition from cutting-edge to the everyday standard has already begun.

Develop your talent

New tools and new methods require new skills. Relationship-building, technological literacy, data analysis, and strategic thinking are the procurement skills of the future. The current strengths of your team members could help identify the roles where they would thrive in the future. This guide from Deloitte will help you manage and develop your procurement talent to align with the goals of your organization. NASPO’s Procurement U is here to provide you with professional development resources to grow procurement capabilities.

For more tips for recovering your supply chain, read this article from Gartner.  For more about overcoming complex obstacles in procurement, check out this report from Deloitte.  For more recovery resources, see NASPO’s Emergency Preparedness Guide.