Securing your supply chain
Listen now:
Pre-contract considerations
The panel kicks off with the importance of laying the groundwork when designing the supply chain and strategic considerations around sourcing, touching upon:
- the merits and challenges of different sourcing strategies, covering insourcing, multi-sourcing, nearshoring, and stockpiling
- sourcing trends that the panel members are seeing in their respective jurisdictions (the UK, Ireland and the USA), including the increased use of technology to monitor and predict disruptions
- the approach to supplier due diligence.
Contracting for resilience
The panel considers some of the ways in which businesses can address supply chain risks through their contracts, outlining several measures that could be built in to mitigate the risk of disruption. The discussion highlights:
- that ultimately there is no 'one size fits all' solution to securing supply chain resilience - a business needs to identify the risks inherent in its own supply chain arrangements and put in place contracts that manage those risks effectively
- the importance of proactively using the early warning mechanisms provided by a good contract, including audit and oversight rights, to identify and mitigate supply chain risk on an ongoing basis
- how the contract itself can be used to help get things back on track if there are performance or supply issues.
Reacting to disruptive events
Taking proactive steps to ensure resilience and minimise the risk of supply issues will put a business in a stronger position than having to react to problems once they arise; however, not all problems can be avoided. The podcast concludes with a discussion of key contract levers that a business can pull when faced with a serious supply chain disruptive event (including force majeure provisions, step-in / step-around rights, and exit provisions) and ways to maximise their effectiveness.
