ID’ing secondary suppliers

Lysol wipes, toilet paper, steak, coins, furniture and appliances.

Before 2020, this would be confused with a particularly strange shopping list. But we are now aware that these products are among the many items that can be hard to find during the pandemic. These shortages are a reminder of how interconnected and complex global supply chains are.

When countries shut down this year, it reminded us how quickly commerce can get disrupted. It can be challenging to find new sources for materials, procure them, find equivalence in quality and reliably certify those suppliers. Supporting customers in their efforts to maintain product quality is one of the many reasons laboratories were considered essential businesses and allowed to remain open during government-imposed shutdowns.

CEOs are more worried now than ever about global supply chains, but the truth is that material sourcing and procurement have always been critical issues, especially in some industries. At the earliest stages of the pandemic, industries such as agriculture and pharmaceuticals were seen to have sensitive supply chains that rely on efficient transportation networks for perishable items. These industries also were exposed as having too much dependence on foreign supplies, with a lack of substitution alternatives.Manufacturing companies were also exposed as having long and complex supply chains involving multiple vendors, which makes them sensitive to production disruption.

The potential for quality differences in supplied materials, components, or products is the primary risk to corporate leaders. A supplier’s lack of a shared commitment to quality, environmental, safety and social responsibility standards can be detrimental to your company’s relationships with customers. Legal language in purchase documents can articulate requirements for many of these items, but test certification is the coin of the realm for critical quality issues. Partnerships with suppliers can include teaching the quality-control methodology you expect, but that may not be possible when suppliers are scarce and demand is high, making quality assurance and control even more essential.

Every company claims a commitment to quality, but there is a significant risk in assuming quality is equivalent across processing companies. It isn’t enough to accept a vendor company’s assurances; manufacturers have long understood the need to perform qualification testing for new vendors of materials or components. The challenge for operations leadership is to find the right combination of testing and frequency to provide statistically relevant information; this testing needs to be done at the time of qualification, and ongoing periodic testing during normal business processes is necessary. Testing every material purchased is impractical, of course, but a qualified Quality Assurance professional can help make these decisions.

The international marketplace presents its own challenges for companies, aside from logistics. Despite many common certification standards promulgated by ISO and ASTM, many countries have specific requirements that aren’t identical to U.S. test methods. A reliable third-party lab partner can be the difference in having the highest confidence in product performance and safety. It also helps to mitigate some supply-side risk and alleviate future bottleneck issues.

Managing supply chain risk has always been a critical business function, regardless of industry sector or company size. The COVID pandemic has simply highlighted the impact, not only to businesses but also to consumers’ daily lives. Broadening trusted networks has never been more important, and testing verification is an essential part of the equation.

Casey Bunker is COO of RJ Lee Group