2. Focus on the most critical suppliers first
Many companies find their internal procurement teams have been stretched thin amidst the supply chain challenges of the past year and are often racing against time to plug gaps. When assessing and doing preliminary audits of potential suppliers, rank and prioritize them based on how critical they are to the continuity of your business and the potential risks a failure on their part might pose to your most important business units, systems or products. To make sure you’re covering all of your bases, consider enlisting your legal firm to check the business registrations of your suppliers and ask your insurance company representatives about any industry-wide patterns among suppliers that are affecting compliance and quality control right now. “They may be able to identify risks you haven’t anticipated,” Hyman says.
3. Heighten your attention to cyber security
Given recent breaches of major corporate and federal government websites, your company can’t afford to simply assume any suppliers’ practices will leave you well protected. If you are not familiar with the cyber security protocols for a client’s industry, bringing in a cyber security consultant to help you vet and interview suppliers may be a good investment, particularly when evaluating providers such as payroll services and payment processors with systems connected to your bank accounts. “These are vendors that have access to sensitive information, and they often provide data that winds up on a company’s financial statements,” Hyams says.
4. Make better use of technology in your due diligence
Go beyond interviewing a supplier’s key personnel by videoconference. If your vendor is a manufacturer, ask to see their operations remotely — including their warehouse facilities and distribution centers — using mobile cameras. Also consider investing in advanced technology that enables your team to work more effectively with suppliers from a distance and achieve greater ongoing visibility into the first and second tiers of your supply chain. Such investments are more common among firms that have thrived since the pandemic, Deloitte noted.
No company can prevent every possible supply chain challenge. Nonetheless, each step you take to learn more about potential suppliers on the front end can help everyone on your team sleep better at night and ensure that your company is ready to make the most of future opportunities.