Resilience required to weather supply chain woes

Businesses face a protracted period of shortages and cost increases as the global supply chain continues to misfire.

The ongoing disruption – created by the rapid bust and boom in demand that bookended the worst of the pandemic – is now expected to persist until 2023.

Business leaders have welcomed mitigation measures announced in the recent budget, but warn that SMEs are facing a dire commercial calculus.

For small businesses already at the limits of their stamina, resilience in supply chains – and across business processes generally – is a pressing imperative, but stress-testing and future-proofing are just as central to strategic decision-making.

Thinly-stretched firms – particularly those supplying to the public sector, or seeking to – must cement survivability into their bid strategies by keeping a close eye on the long game and avoiding reactive rainbow-chasing.

The centre cannot hold

Meaningful mitigation of supply problems at national level is a tall order: the causal factors are global, with assorted shortfalls, gluts, delays and cost increases all part of a complex cross-border domino effect.

The lull in consumption caused by COVID has left global shipping capacity out of sync with resurgent demand, creating queues, delaying deliveries and driving up overheads.

A lack of lorry drivers has slowed distribution and strained storage capacity, exacerbating backlogs at major ports and creating shortages at points of sale: the government is seeking to ease the driver deficit by handing out visas, but suitably skilled labour is scarce internationally and symptomatic of a wider skills shortage.

But stopped-up supply chains may prove be more of an evolution than an aberration, acting as a catalyst and a proving ground for new concepts and technologies.

History has a nasty habit of arriving unannounced and crushing comfort zones, but unexpected events tend to incubate fresh solutions and success stories.

Tech sector innovators in particular have reason to be optimistic: financial technology, automation and AI have been catalysed by lockdown and the current crisis, with startups in these fields attracting record investment.

Intellectual inertia in the face of epochal change can serve to stunt and sabotage previously unassailable businesses: those who cling to conventional wisdom and rest on old laurels will find that all glory is fleeting.

Time is the fire in which we burn

The only real cure for rising costs is to level up as merchants and secure more revenue, but restraint is as vital as vigour: brands with staying power are typically built by enthusiastically adaptable intellects and farsighted strategies.

SMEs bidding on public sector tenders must be cognisant of the long-term drawbacks of coveting large, labour-intensive contracts: the cost-benefit ratio can be far less favourable in practice than on paper.

The growing prevalence of commendable but supplier-funded bells and whistles in public procurement – as well as the sapping of capacity and operational freedom that comes with winning big ticket tenders – can turn the prospect of megabucks into a mirage.

One large pot of gold can ultimately be less profitable than several smaller pots secured in stages: building a portfolio of below-threshold contracts can be far more rewarding than chaining your business to a prestigious but all-consuming millstone.

Moreover, public procurement exercises are are increasingly influenced by pre-competitive supplier engagement, which allows firms with fresh solutions to gain insight into – or even prompt a shift in – the parameters of future contracts.

Award criteria in public sector tendering may be rigid, but the needs of buyers are fluid and often intimately informed by private sector input.

Proactive interaction with buyers doesn’t just provide innovators with a potential edge: it advances the aspiration that public procurement be a vibrant value-centric marketplace rather than a retrograde race to the bottom.

To strive, to seek, to find, and not to yield

Truly resilient firms – and teams – don’t just tough out tumultuous times: they plan to come out on top by accepting adversity as a chance to evolve, excel and succeed.

Competent leadership and a civilised corporate culture are crucial in the creation of adaptable, engaged and committed workforces and critical to commercial longevity: cognitive resilience is the fuel of innovation, the root of all profit.

Some large companies – including, unfortunately, certain public sector suppliers – succumb to a catastrophic culture of short-term careerism, driven by nomadic narcissists who abandon basic boardroom logic in favour of instant gratification before farcically failing up and gorging on golden goodbyes.

This blinkered obsession with breakneck expansion often descends into diminishing returns and strategic failure, with the craven culprits rarely held responsible.

Making rational and responsible judgment calls in the interests of the business – and not for the benefit of bonus-hungry bottom-feeders – is a baseline for robust brands.

Happily, the team at the TenderHood are ramping up efforts to divert more public sector spend towards productive wealth creators and away from gormless graspers.

John Cutt Reporter for The TenderHood

John Cutt is a storyteller and researcher with extensive commercial experience in public sector tendering and procurement.

His services include creative and technical copywriting, SEO, social media management and brand consultancy.

Disclaimer: all views expressed are the authors opinion unless expressly stated as factual

Resilience required to weather supply chain woes

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