Supply Chain…Insecurity?

In the fine and specialty chemical space where I operate, manufacturers have vastly improved supply chain security, to their great credit, particularly after the wake-up call that was COVID-19. For example, in the years prior, single sourcing of raw materials or services was not unusual, or perhaps preference was given toward one vendor with an obligatory purchase from an alternate just to maintain decorum. Everything was fine, costs were reasonable, supply was based on relationships, you’d get your product, maybe encounter a hiccup once in a while, but you managed. Everyone did this.

But now…that’s over.

Business contingency planning transitioned from fashionable accessory to smart move, preparing for unforeseen events of all types. Secure supply chains based on multiple vendors, subject to written agreements, became critical to improving cost positions and avoiding manufacturing disruptions (anyone remember the CDT shortage in 2012 that nearly crippled the auto industry?) The pendulum swung away from offshore producers, with favoritism toward domestics, in some cases regulated by “Buy American” provisions. Logistics slowdowns exposed further weaknesses in vendor performance, including the freight forwarders themselves. Lastly, change management provisions required greater scrutiny to assess the potential risks of new vendor qualifications.

With all that being said, has supply chain security actually worked against its very mission? I’ve experienced it, so my answer is…yes.

Today, I network with a wide variety of manufacturers looking to introduce their products into new markets and geographic regions. Some of these companies produce in countries that might not be on the radar of procurement teams. Products are of high quality, supply is reliable, and logistics are well-managed. Should they be dismissed in the name of locked down sourcing policy? Perhaps the engagement process may expose you to new molecules or product ideas, or other immeasurable side benefits.

Supply chain security is holistic and should be evergreen. Use it to begin fresh dialog, improve the overall strength and safety of your business, and gain a more competitive edge.