In times of crisis, which supplier relationships should be prioritized?

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With COVID-19 has come drastic declines in manufacturing capabilities, leaving supply chains struggling as leaders balance protecting their workforce while maintaining operations. As the virus continues to spread and more firms take action to mitigate their risk, it becomes impossible for companies to track the resilience of each of their suppliers. As a result, it is even more important for operations leaders to identify which of their suppliers are critical and are worth investing limited resources to track. However, prioritizing these suppliers is no easy task. Below are a few recommendations to keep top of mind while evaluating your supply chain.Determine which criteria qualify suppliers as critical.When prioritizing suppliers, it's easy to rank those that make up the bulk of spend as most important. However, this isn't always the case.Be sure to consider a range of criteria when making your decision.Investigate indicators of supplier health. A company's health should be included in the previously mentioned criteria. If a supplier is showing signs of instability, then they may not be the best option during times of crisis. These indicators should include, but are not limited to, shipment slippage, invoicing timeframes, and employee sentiment.Evaluate any alternative sources of services or materials. Give priority to suppliers whose products are critical to the manufacturing of your own and whose products you can't obtain from another source. This is because, should they shut down, you may be at risk for having to halt operations.To learn more about understanding and tracking the health of your supply chain, please read our articlesManaging the unmanageable: operating a global supply chain in crisisandNearly Everything You've Been Told About Procurement Analytics is Wrong. More information on COVID-19 and its impacts may be foundhere.