With the world adapting to the rapidly changing landscape created by the COVID-19 pandemic, supply chain disruption has become a top-of-mind concern for companies around the globe. Despite these disruptions, however, numerous regulatory deadlines and their accompanying obligations remain in place.
As a result, many companies will be facing regulatory obligations with limited resources, posing serious revenue and business continuity risks. In light of these risks, supplier outreach and engagement are an increasingly high priority with only a few short months until market-limiting regulatory deadlines take effect. Developing robust strategies for mitigating these supply chain disruptions is vital for continued regulatory compliance.
Key Questions to Ask When Assessing the Future Viability of Suppliers
1 — “Is your organization experiencing disruptions due to COVID-19?”
The most immediate concern when reaching out to suppliers should be whether or not they are experiencing any disruptions to normal operations due to the pandemic. It’s also possible a supplier may expect to face disruption in the near future. Reaching out to suppliers is a vital first step toward determining the full extent of the risks facing a company and their ability to continue to conduct business as usual.
2 — “How has your organization been affected by COVID-19?”
The impact of the illness on a supplier’s workforce has an immediate effect on their operations. Further, the presence of the virus at a supplier facility can pose additional business and safety concerns that can impact both the supplier and the customer’s facilities. Stalled operations can quickly result in a delay in parts, components or materials necessary for the final delivery of a product.
Companies on the frontlines of the COVID-19 response, producing medical devices and products, are particularly concerned with any potential disruption. Tracking and understanding the financial implications and potential insolvency of suppliers is of critical importance during the ongoing economic hardships that are unlikely to be alleviated for some time. As such, suppliers are likely facing heightened pressure to provide accurate information about the impacts the virus has had on their operations and to ensure their facilities are implementing effective safety precautions.
Regardless of the industry, understanding the pressures facing suppliers is vital to getting information that informs decision-making processes during the pandemic. Suppliers facing particularly severe challenges due to the virus may not be able to support demand. In these instances, companies may be forced to find alternative sources to meet their business needs.
3 — “What steps are you taking to mitigate COVID-19 risks?”
The steps suppliers take to mitigate COVID-19 risks play a vital role in their ability to continue to conduct business as usual. It should be noted that risk mitigation extends beyond physical distancing, and encompasses everything from a business continuity plan and emergency response or preparedness plan to ongoing communication with local government and worker protections.
Throughout all aspects of this process, companies should be aware of the highly sensitive nature of the challenges and stresses facing all those impacted by COVID-19. While business continuity remains the primary concern for companies, understanding that the impacts faced at the individual level should be a major consideration at all times.
Continue to check back with the Assent blog to stay up to date with the latest information on how COVID-19 is affecting the regulatory landscape. For more information on effectively and efficiently gathering supplier data related to the impacts of COVID-19 disruption, and to learn more about how Assent can help, contact our experts.