Reviewing your supply chain
Assess your supply chain to limit disruption and to give yourself the best possible cash position.
Having a secure supply chain is an important aspect of the health of any business.
Below, we look at how you can review your supply chain to make your company more resilient.
Improve your cash position
You can review your supply chain to try and improve your cashflow.
It's important to make sure that you time your payments to suppliers in a way that helps your business's cash position.
For this, you might consider the following:
- taking full advantage of creditors' payment terms
- using electronic funds transfers to make payments on the last day they are due
- communicating with suppliers clearly if you ever need to delay a payment
- with major suppliers, renegotiating the headline payment terms if you're a key customer
- considering carefully whether suppliers' discounts for early payment make sense
- when choosing your suppliers, considering which has the most flexible payment terms.
You could also consider using supply chain finance or other forms of asset-based lending to free up additional working capital from your supply chain.
Reduce your risk of disruption
You should review your supply chain periodically to limit the risk of disruption to your business.
This is particularly important during periods of major uncertainty.
You could consider the five steps below:
- On-shoring or developing local suppliers might make supply more reliable. Learn more about finding new suppliers
- Make your manufacturing and logistics operations as efficient and effective as possible. This may involve reallocating production facilities. Digital technologies and advanced analytics tools can assist in this.
- Build up safety stock levels in the short to medium term.
- Prepare for changes in demand.
- Spend money on research and development (R&D) strategies to manage changes in your product specifications, for example as a result of Brexit-related regulatory changes or shifting consumer demands.
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