Fifth of purchasers concerned about supplier 'capacity squeeze'

1 October 2013

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2 October 2013 | Will Green

 

More than a fifth of buyers are concerned about the capacity of their suppliers to deliver as the economy picks up, according to the latest SM100 survey.

 

Business surveys have indicated economic growth, while chancellor George Osborne has said the economy is “turning a corner”.

 

The survey showed that 22 per cent of respondents were concerned about where they stood with suppliers in the face of a “capacity squeeze”.

Tom Woodham, director of procurement and supply chain consultancy Crimson and Co said: “If you are not a customer of choice for your key suppliers then it can be easy to become the victim of a capacity squeeze.”

However, most respondents (78 per cent) believed the work they did monitoring contracts and suppliers meant any potential problems could be solved.

Cristian Martin, procurement and contracts officer at the Commonwealth Secretariat, said: “Strategically important contracts are monitored regularly and we have ensured we are a key account with those services with liability damages in place. Otherwise, within reason, if a company asks for extra time to deliver a service, we can accommodate this.”

John Milne, procurement consultant at engineering consultancy Hampco, said: “Although everyone will be aware of the risks to the supply chain associated with equipment shortages, skill shortages and the other factors that have resulted from the recession, there is no doubt that suppliers will be as eager and well equipped as the buyers to cope with the problems of recovery.”

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