LONDON--(BUSINESS WIRE)--SpendEdge, a leading provider of procurement market intelligence solutions, has announced the completion of their latest article on assessing the risks of second sourcing to improve supply chain risk management and manage the impact of COVID-19.
The outbreak of COVID-19 has hit global supply chains. Companies in the US are no exception. They are striving hard to increase supply chain resilience and improve supply chain risk management. Creating supplier relationships in the time of such an extensive crisis can be expensive and time-consuming. Second sourcing can prove to be an effective way to source non-strategic items and critical supplies. But before opting for second sourcing to improve supply chain risk management, companies need to assess risks associated with it.
By consolidating metrics across various sectors of the supply chain, SpendEdge helps clients identify the structure of the supply chain and assess risks associated with second sourcing. This includes analyzing stakeholders’ supply capacity, fluctuation in supply capacity, and its impact on prices.
Key Questions to Assess the Risks of Second Sourcing and Improve Supply Chain Risk Management
Are all the commodities sources in the quarantined areas?
In many cases, the supply chain crisis for companies in the US stems from regions that are adversely affected by the COVID-19 pandemic. Companies must keep a close watch on sourcing clusters in order to ensure the sourcing of products that are vital to industries such as pharmaceutical and healthcare. Such decisions cascade down through supply chains and impact even those companies that don’t directly source materials or products from China and lead to a shortage of supplies in the US.
Want to obtain actionable insights to assess risks associated with second to improve supply chain risk management and manage the impact of COVID-19? Request a free proposal to gain insights into our customized solutions.
How much will it cost to develop a second supplier?
Executives are apprehensive about developing second suppliers. Identifying and validating a second source is both time and cost consuming due to the prolonged city-wide lockdowns and quarantines. Labor shortages are impacting the logistics and many commodities from the U.S. to China are being diverted to ports in Hong Kong, South Korea, Taiwan, and Vietnam due to space issues. Finding alternate suppliers in such a crisis may require companies to conduct safety tests and understand changing compliance norms. To enhance supply chain risk management and obtain second sourcing insights in the US, get in touch with our experts now!
Is the alternative source compatible?
The compatibility of the alternate source is a major concern for companies. It is difficult to find second sources identical to an established supplier even when a company's due diligence is thorough and searching. These sources can increase the likelihood of quality issues and complicate after-sales support. Some US buyers have already initiated moving sourcing away from China due to the rising trade tariffs.
To minimize the impact of COVID-19 and improve supply chain risk management, reach out to our analysts now!
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