Prioritising Your Customers and Suppliers

Of course, all businesses need to maintain good relations with their customers and suppliers, and no doubt you spend considerable time and effort doing so. Therefore, the last thing you want to happen is for a disruption to put these carefully nurtured relationships at risk. In this section, we discuss a few precautions you can take to mitigate that possibility:

Think about your critical suppliers and customers so that you know which to concentrate on when a disruption hits. A very simple approach is to get hold of a list of all your suppliers and plot them on a matrix that shows the criticality of the things that they supply and the amount you spend with them. Carry out a similar process with your customers to show how much they spend with you and any onerous contractual penalties. Figure 3-2 shows an example of this kind of matrix.

A graph like the one in Figure 3-2 can identify those suppliers that supply critical products (they’re plotted higher up on the vertical axis), and those suppliers that your business spends a lot of money with (plotted further to the right on the horizontal axis). So you see the suppliers that deliver critical components and that you spend the most with. (However, bear in mind that the volume of goods purchased with a supplier, not cost, may be the most important factor to your business.)

Find out what continuity measures your suppliers have in place. For the suppliers that you identify in Figure 3-3’s matrix as being critical and/or high volume, ask them whether they have BCPs in place and if you can see a copy. If they’re that critical to your firm but don’t have any continuity plans in place, find another supplier or work with the existing one to help it put something in place.

Even when you have the most secure BCPs in place, if your sole supplier doesn’t then the danger of failure somewhere along the line remains high. An investment, such as working with your key suppliers to help them put BC in place, not only makes your supply chain a bit more resilient, but also may reveal other frailties that you need to address – the sorts of things that you wouldn’t be aware of until your expected delivery of raw materials fails to arrive.

Ask your customers what service level they expect from you while your business is suffering a disaster and afterwards. Putting a Service Level Agreement (SLA) in place is a good idea so that in the event of difficulty you know exactly what suppliers expect of you and can work this into your BC considerations.

Come up with other ways to influence the resilience in your supply chain. In the bath one evening – you need to be relaxed – think about your suppliers and their suppliers and their supplier’s suppliers and see whether you have any influence on the chain that enables your business to function. The key is to focus on the suppliers that are crucial to your core business functions. If your stationery supplier lets you down, you simply run to the local retail park and get the things that you need. But if your sole oohjamiwotsit cog supplier lets you down in supplying the cog that keeps ‘line 1’ running, life may be very different.

Question your professional services vendors about what help you can expect from them if you have a disaster. Accountants, lawyers, doctors, bankers and consultants may offer you advice, special terms, office space at their premises and/or back office help. If you don’t ask, you don’t get (of course, sometimes you ask and still don’t get, but you know what we mean). Also, look into what plans and procedures they have to keep you going if they have a disaster.

Use your supplier contacts for advice and support. This point may sound obvious but you can be surprised at how far suppliers may go to support a customer. Use this support to ensure that you can keep your business running when disaster strikes. Your suppliers have a wealth of experience in dealing with all sorts of disruptive events and may be able to advise you on the best course of action or even provide support through offering the use of their premises or hauliers, for example.

Get to know your suppliers. Whether you’ve not ordered enough to meet the demand of your customers or your supplier has had a disruption at its end and is below usual capacity, the relationship with your supplier can be crucial. If the supplier is that important to your business and supplies goods that form part of your business’s critical activities (the ones we focus on in Chapter 4), building up a good relationship is an essential investment. Doing so may mean a face-to-face meeting each month and doing your bit by providing regular forecast updates for orders, or even inviting your contact to the firm’s Christmas do – simple stuff that can make all the difference when push comes to shove.

Discover how important you are to your supplier. If you’re a big customer, you can expect a higher priority than a small customer, and vice versa. If you discover that you’re of low priority then it’s time to start looking at ways to increase your firm’s importance with the supplier through additional orders or face-to-face discussions. If this isn’t feasible, seek out alternative suppliers while you have time on your side. The worst time to find out that you’re not on the priority list of one of your key suppliers is during a disruption!