Revealed: How businesses are sourcing their component parts in 2021

COVID 19 may be named after the year 2019, but its impact was felt most throughout 2020. As the world recovers from almost complete trading disruption, business leaders in the manufacturing industries have a problem to solve. Namely, procurement. Let’s look at how businesses are sourcing their component parts in 2021.

Supply chain – managing risk and resilience

The businesses working hard at the bottom of the supply chain have been finding ways to manage risk and become more resilient (they need sales too!). Your task is to find the businesses that have proved the most resilient, as they are your best shot at securing regular deliveries of the raw materials you need (check out this ecommerce market place for the electronic component parts industry, for example).

To do this, you need to get savvy and perhaps be ready to disregard any previous long-standing partnerships with now unfit suppliers. If it doesn’t make money, it doesn’t make sense. Sticking to what you know isn’t the best angle here. You need to search online for success stories and pay close attention to the social media shout outs where clients have been impressed with the fast and efficient delivery of materials, all despite the pandemic.

Look at changes in the law

The pandemic isn’t the only thing going on. America has a new President. The UK is transitioning through Brexit. Warnings over possible difficulties between China and Taiwan in the coming years are there to read in the news. Can you be sure that your supply chain won’t be disrupted by changes in policy around the globe?

You are going to have to consider your supply chain from every angle, because the best solution on paper may not prove to be the best solution in six months. Make sure you carry out due diligence in choosing your trading partners, or you may face cut-offs and unexpected tariffs that your competitors were smart enough to plan to swerve.

Partner with your partners (could a merger be the solution?)

Smaller suppliers were at the greatest risk during the height of the pandemic. Those who survived may still be fragile and could probably benefit from investment opportunities. Could you be the merger or acquisition they’re looking for?

Securing your component parts in 2020 was almost certainly more difficult than ever before. Can you rely on the industries that support your industry to survive long term? What about if another virus hits? Wouldn’t it be better to have control – or at least say – regarding the big decisions affecting each supplier’s ability to fulfil your orders?

Something else to focus on…

Securing component parts in 2021 might mean dealing with startups who can offer no reputation or portfolio of success stories. Be ready to root out poor labour standards at every turn. Where people think they can make a quick buck, they will try their luck. Don’t let them play games with your supply chain. Get out the moment you aren’t satisfied with the performance of new partners.

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