Planning starts with suppliers

Paul Teague, Editor-in-Chief -- Purchasing, 10/6/2005

"Listen to your strategic suppliers and heed their input." That advice was one gem of wisdom among several that we heard from readers who responded to a short survey on their contingency-planning efforts in the wake of Hurricane Katrina. And it's a natural extension of that trend toward closer relationships between procurement staff and their vendor base that has been transforming the supply chain world during the last several years. Certainly, if there is ever a time when the importance of supplier relationships is clear for the world to see, it's during an emergency. Those procurement staffs that have paid closed attention to the nurturing of their supplier base are no doubt weathering the storm with less disruption than those who haven't taken supplier relationships so seriously.

Unfortunately, many companies, our survey shows, have neglected one important aspect of that nurturing: working with suppliers to set contingency plans that will help everyone get through disasters such as Katrina with minimum disruption.

Forty-six percent of our survey respondents say they have done no contingency planning to ride out storms or other disastrous events. Another 12% say they don't know if their companies have contingency plans.

As procurement continues to take on a more visible and strategic role in industries of all kinds it has to take the lead in contingency planning just as much as in other aspects of the business. In fact, corporate officers expect that. They really have no one else as qualified to turn to.

Procurement and supply chain staff themselves can turn to each other for help and share examples of successful contingency strategies. Because of its own infrastructure and expertise, logistics and retail giant Wal-Mart, for example, was able to get truckloads of water, ice and dry food into some hard-hit areas where other assistance couldn't get in. The company also delivered computers to various shelters and managed to get water and basic necessities to the New Orleans police department.

That company is expert at contingency planning. As Katrina has shown, every company needs to be. And contingency planning, as so many other things in business, starts with supplier contact and communication.