Crisis as an opportunity: Navigating uncertain times in purchasing

Building up resilience in the supply chain

In current uncertain economic times, effective crisis management is becoming increasingly important. As an experienced purchasing consultant, I draw on many years of experience, including my active involvement in overcoming challenging situations at a leading automotive supplier.

The automotive industry with its complex supply chains relies on agile crisis management. Our experience during the task force’s work during March 2020 showed that recognizing potential risks early is key. By forming an interdisciplinary task force, we were able to develop creative solutions. Building close relationships with suppliers proved to be a key success factor in not only preventing bankruptcies, but also in stabilizing supply chains.

In uncertain times, keeping an eye on details and having an in-depth knowledge of product groups is crucial. Carrying out specification checks and regular technical inspections have become central elements of our activities. These findings show that crisis management is not only about solving acute problems, but also requires a strategic approach.

Crisis management as the key to success

In times of uncertainty, effective crisis management is essential. As a purchasing professional, I have the following advice to help companies not only master short-term challenges, but also to develop long-term, future-proof purchasing strategies. In the current situation, it may be helpful to:

1. Identify risks at an early stage: Focus on proactive crisis management. Identify potential risks in your supply chain early on, be it due to bankrupt suppliers, supply bottlenecks, or other disruptions.

2. Work closely with suppliers: Establish a close working relationship with your suppliers. Maintaining an open dialog, regular discussions, and a willingness to find solutions together is crucial. Draw on experience from a case study where financial support was offered to save a supplier from bankruptcy.

3. Keep an eye on specifications and technical details: Check the specifications and technical details of your products regularly. Avoid knowledge gaps that could lead to problems in critical situations. Involve not only the purchasing department, but also other relevant departments.

4. Diversify suppliers: Identify “killer products” in your product line that are particularly sensitive to supply bottlenecks. Rely on diversification and work with several suppliers to minimize downtime.

5. Make proactive bankruptcy checks: Regularly monitor indicators that could point to the threat of bankruptcy. Check well in advance who owns the machines and tools so that you remain capable of acting when a bankruptcy occurs.

6. Use good sense instead of a sledgehammer: In a crisis, the right touch is crucial. Working openly and respectfully with suppliers promotes cooperation and makes it easier to find solutions.

Cohesion and flexibility as the key to success

The current situation demands a high degree of flexibility and cohesion from purchasing departments. By proactively managing crises, working closely with suppliers, and paying attention to detail, companies can successfully navigate through uncertain times. Diversifying suppliers and a proactive bankruptcy check are just as important as treating each other with respect. In these times of transition, it’s important to overcome challenges together as a team and to focus on long-term, sustainable strategies in purchasing.

Let’s talk about this subject, via LinkedIn or in a free appointment. Find more exciting topics in my book Purchasing in Transition [Der Einkauf im Wandel].

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