In this rapidly changing and uncertain environment, the role of the supply chain is in sharp focus. Businesses dependent on domestic and international suppliers are under pressure to mitigate potential disruptions. The resultant shortages include plant, raw materials, critical components, finished goods and labour.

Globally, companies involved in constructing anything at the moment are asking themselves difficult questions: how will the supply chain look in the aftermath of COVID-19? How will capability be altered?, (If your supply chain is dependent on raw materials, critical components, equipment and finishing products) how are we going to get stock and secondly support the supply chain to deliver timeously to weather this crisis? We have experienced shortages upon resurgence across all our regions.

If you have identified high risk, high impact supply chain disruptions, the following five points will support you to position your business and get the best results from the market amidst these trying times.

1. Re-check criticality

Have you correctly determined ‘what’ and ‘who’ are business critical to your project and operation? For most project based organisations, up to 80 per cent of the personnel working in offices and on-site are third party employees, supported by external vendors whose competencies and products will be required when the market recovers. We recommend you review your spend profile, discuss with your internal stakeholders, and look to review alternative supply options now.

2. Increased regular open communications

Are you talking enough? Make sure you are aware of your supply chain’s business continuity plans. This also indicates you are attentive and willing to help as time progresses. Whilst pricing and staying competitive are important, open and frank discussions regarding timing and expectations will help suppliers to react timeously and get the project done.

3. Specialist’s discussion

Are the right people talking to each other? Connecting experts from your organisation and those of your supply chain can broaden your knowledge of what is happening and help to give a more informed decision on next steps. There may be requirements to look at alternative products which are available currently. Finance director to finance director level conversations can often add significant value, advance payments and potentially client supply materials might be required to support a supply chain suffering financially. Both client and supply chain need to work in ways that are unconventional, and where we are experiencing this open mindedness we are managing to deliver and get results.

4. Review your terms and conditions

Is your commercial model appropriate for the market? Where businesses have achieved a strong market price in previous negotiations, is it worth looking at the cost benefit analysis of maintaining the relationship with an alternative model? Finding an alternative supplier at this stage is likely to be inefficient compared to a more collaborative approach.

Negotiating a change in commercial and payment terms for a fixed period of time may well sustain both organisations, rather than drive insolvencies and supply chain failure - if you supply chain fails, so does your project.

5. Drive innovation and continuous improvement

Are you listening to your supply chain’s ideas and initiatives? – there could be alternative products or ‘ways of working’ that might be more appropriate. Generally international borders are still closed as are many manufacturers around the world. Our Asian clients are now looking at their own supply chain to develop specialist equipment, parts and tools required for projects. In some cases prices are discussed openly and support via long term orders, has been provided to assist suppliers to upskill and deliver the quality required locally. 

Sites are starting to open up on shift type working (x3 per day), reducing numbers on site and secondly where possible manufacturing components off-site and “dropping them in” has allowed additional social distancing. Obviously this takes planning and some “out of the box thinking”, but at the same time projects are being completed safely and on time