11 May 2009
Having more pre-qualified suppliers than you require is one way to mitigate supplier risk, according to Lisa Martin, senior vice-president of worldwide procurement at Pfizer.
"Then if you need to change them, you can." Addressing the ISM event's opening ceremony, she said contract flexibility was also essential but should be carried out sustainably. "Don't cause chaos by renegotiating everything."
Delegates also heard how buyers should keep a shortlist of alternative suppliers' capacity at other sites that may be able to provide stock, updates on how long it may take to change supply, the complexity of such a move and the costs involved. When alternative vendors were not on hand buyers should use "next-best" alternative materials.
The delegates heard that in the US more than 100,000 businesses, with combined assets of $1 billion, went bankrupt in 2008.