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Are Suppliers Disappearing?

29 November 2011

It’s unlikely that any of us could have imagined that we’d see a day where suppliers disappeared. From the number sales calls that we receive alone, it seems impossible.

Yet recent evidence suggests that a significant number of suppliers in the global supply chain have collapsed [1].The results are somewhat alarming; particularly for firms working with approved suppliers.

According to Wilkins Kennedy’s report, a Top 22 accountancy firm, the number of insolvent businesses supplying goods and services to the public increased by 47% from 2009 to 2010 [2].

Craft Training & Certifications

PICS will verify Craft Training and Certification for accuracy and applicability. A PICS Safety Professional will review all Craft Training documents to ensure that they are in line with the employee’s job description.

No Longer Steady

It appears from the evidence, that supplying to the public sector is no longer a steady gig.Why should this concern you? The supply chain is becoming an increasingly hot topic. Working with approved suppliers is a major part of the way that most of the world does business. In fact, supplier prequalification and contractor management is so popular, that there is a Five Step Vendor Selection Process [3] designed explicitly to help purchasing agents get through the “complicated” and “emotional” tasks of vendor selection.

Increasing Customer Demand

While dealing with the “emotional” aspect of identifying approved suppliers, may not worry you, there is no doubt that supplier relationship management is key to business success. These findings suggest that because the number of highly used suppliers is declining, the number of remaining suppliers may struggle to support increasing customer demand.

What does that mean for your business? Well, with a lower number of suppliers to choose from, and an increased demand being made on the suppliers remaining, you need to be more careful about selecting qualified and approved suppliers. As Procurement and Supply Chain Managers cut costs, and suppliers become scarce, you need to be sure safety does not get lost in the mix.

Select Safe Suppliers

You can take a few simple steps to ensure a safe selection of suppliers. First, set and enforce safety expectations with existing approved suppliers. For new suppliers, ensure that you communicate your safety expectations before you award any kind of a contract. Then, actively pass on these safety expectations to your staff; you can’t communicate too much, too often, your staff needs to be aware of the changes being made.

Hold Safety Meetings

Begin holding contractor safety meetings. Clearly communicate the dates, times and location of the meetings and establish a Contractor Safety Council at the facilities where contractors are present. These actions will communicate your safety focus to approved suppliers and employees alike. Next, take contractors through any site-specific expectations, to ensure they have all up-to-date information and are prepared for any emergency situation.

Most importantly, implement a yearly evaluation process to benchmark your efforts. These preventative measures will not only help your business stay safe; they will help ensure that in a day of dwindling approved suppliers, you are not left with the stragglers. Your outside workforce will be a solid, pre-screened team; ready and prequalified to work in a safe environment.

References:

[1][2] Source: “Public Sector Suppliers Suffer Surge in Insolvencies As Government Cuts Take Hold.” Wilkins Kennedy. Article accessed: 8 November 2011. WilkinsKennedy.com

[3] Source: Bucki, James. “The Successful Vendor Selection Process.” About.com. Article accessed: 8 November 2011. About.com