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OPINION
STUCK IN A RUT? Prompting widespread delays, disruption and shortages, Covid-19 has put unprecedented strain on supplier relationships – but while some battle to diversify, others’ ties are stronger than ever, writes Paul Farley …
When it comes to business relations, is divorce on the cards, or a renewal of vows? (image credit iStock.com/raisbeckfoto)
BUSINESSES THAT HAD PLACED ALL THEIR EGGS IN ONE BASKET BECAME ACUTELY AWARE OF THE NEED FOR DIVERSIFICATION
On 23rd March, the Ever Given, a 400m-long container ship, wedged itself in the Suez Canal, holding up more than 400 vessels at either end of the 120-mile waterway for the best part of a week. The debacle encapsulated the occasional fragility of global trade – reflected throughout the pandemic through material shortages, delays and price hikes, which, when coupled with lockdowns and factory outbreaks, meant that in supply terms, certainty was hard to come by. It was not just imports which suffered – national manufacturing operations floundered when the components and materials vital to their work failed to arrive in time. Faced with furloughed staff, online acceleration and an insatiable consumer hunger for homewares, many had no option but to see Covid-19 as a recipe for change. Businesses that had placed all their eggs in one basket became acutely aware of the need for diversification, so the hunt was on for alternative supply sources, identifying fall-back options to mitigate the risk.
No stone unturned Thanks to the widespread cessation of traditional sourcing channels (from trade shows to factory visits, both near and far), exploring new options has proved no mean feat. “Emergence will be a transitional process where we must look to Government to help, trade bodies to raise awareness, and to ourselves to use creative thought and research innovative solutions through identifying new markets,” says Dids Macdonald OBE, the CEO of IP rights champion, ACID. “The reality is that this has a significant impact and puts unnecessary stress on an already stressed and frustrated industry. There is no quick fix, apart from identifying the issues and raising awareness, then sharing information on issues (such as the lack of foam).” Importers such as Core Products were forced to adapt to the material supplies available, says CEO Mike Rowley – yet the appetite to engage new partners has also created opportunity. “All plans got brutally derailed in the spring of 2020,” says Henrik
