With a recession no longer looming, but in full swing entering 2009, the best management advice may come from none other than the old Boy Scouts handbook: Be Prepared. That’s particularly important when it comes to working with suppliers, according to Tim Minahan, writing in Supply Excellence (www.supplyexcellence.com).
Given the financial storm, you can not assume your key supply partners are healthy, you have to make sure they are through audits and more f requent performance reviews, perhaps as often as four times a year for the most important partners. Early signs a supplier might be in trouble include shipment delays or drops in quality, more frequent requests for payment or changes in personnel.
“As much as we can we try to get visibility as far out as possible, but you have to a certain extent expect some kind of distruption and have strategies in place on how to deal with them,” said Laurie Latham, the CFO of ViewCast (www.Viewcast.com), which manufactures hardware and software for the streaming video business and deals regularly with electronic components suppliers.
And don’t be surprised if your supplier is making the same demands on you. While Minahan adds that we all will experience some sort of supply disruptions in 2009, those on the lookout for the warning signs will be those who best ride out the storm.