Maintain the top line with a diversified supply chain

COVID-19 has impacted nearly every aspect of life in 2020. Changes once thought temporary in the business world are turning into potential long-term modifications. In addition to an increase in remote work wherever possible, many organizations now see the need to diversify supply chain sources such as manufacturers and distribution centers.

As this coronavirus continues to negatively shape global manufacturing and consumer reach, Charles Aris vice president Sarah Becker – who focuses her executive search efforts in the consumer operations sector – is underscoring the importance of assessing vendor sourcing strategies.

“COVID hit many companies hard, especially those with a single-supply source or vendors based in China,” Becker said. “As borders closed, product flow slowed or ceased. It created consumer fulfillment challenges within many consumer companies.”

As a result, businesses are now even more focused on optimizing their supply chains to drive cost efficiencies, reduce inventories and increase output. Deloitte, one of the world’s Big Four accounting organizations, confirms COVID-19 has exposed the vulnerabilities of excessive reliance on one source to fulfill supply chain needs. More than 200 of the Fortune Global 500 firms depend on Wuhan, the east central Chinese city hit hardest by this coronavirus early on, for raw materials and finished products alike. These organizations have experienced significant disruptions from the worldwide shutdowns which have dramatically altered supply chain operations.

“As we look forward and react to COVID and how it’s impacted our world, companies are looking at how to create a more diverse supply base by making sure that if one channel is shut down, there are alternate channels to keep product flowing,” Becker explained. “Some of this includes the opportunity to look at countries that businesses may not have looked at before, and some of that includes the idea of reshoring a portion of their manufacturing so they can keep some level of production rolling despite the challenges of sourcing.”

To protect their global sourcing capabilities, Becker added, organizations need to act in the interest of their own business models: It’s imperative that they take time to re-evaluate their vendor sourcing strategies, potentially spreading risk across multiple regions to help stabilize their top line.

Accordingly, more and more executives are shifting their mind-set to balance diversity in their supply chain with profitability. As many have experienced during the COVID-19 pandemic, product flow often halts without such diversity, adversely impacting revenue and profitability in turn.

“From a talent perspective, organizations are realizing they can’t wait for COVID to lift to solve and conquer these challenges,” Becker said. “They are making financial exceptions to hire within operations to ensure they are creatively and quickly protecting their product flow so they can maintain and grow their customer base.”

The bottom line? Taking prudent steps in the present likely will increase your odds of success in the future. If you haven’t already done so, assess your vendor diversity and act accordingly.

Looking to add A-level talent to your team? Contact Sarah Becker at 336-378-1818 x9147 or sarah.becker@charlesaris.com.