Globalization has given B2B companies access to a seemingly endless list of suppliers and buyers, lowering prices and shortening delivery times. That is, until a disruption is introduced into the global network that ripples through the system.
Some disruptions have a more limited scope (only affecting certain industries or regions), while others have a more widespread effect. The pandemic has been the widest reaching business disruption of our time, and it is not going to be resolved anytime soon.
In fact, over the last few months “supply chain” has quickly become the new trending topic that everyone is talking about. However, most B2B companies have been dealing with supply chain woes for almost two years now. And with no end in sight, they are feeling the pressure to get even more strategic with how they approach supply chain disruptions.
So, how should you handle today’s ongoing supply chain disruptions… and tomorrow’s?
It might sound a little bit obvious to say that you should sell whatever you have. However, when it is hard to get raw materials, packaging, labor, or any other components that go into what you make it becomes even more critical for your sales team to sell what you already have. The B2B companies that are the best at pivoting are the ones who understand this. If you cannot get what you want, try to get what you need instead and make it work. If you cannot get that either, sell what you have right now while you figure out what to do next.
Another selling strategy is to increase your storage capabilities in-house or through a Third-Party Logistics (3PL) company. Investing in a 3PL relationship allows you to get goods when they are available, buy goods before price increases, bulk purchase goods at a discount and then store them for when they are needed.
Remember, if supply chain issues are keeping you up at night, your customers are likely worried too. Focus on supporting them through these supply chain challenges by being honest and transparent with proactive communications to offer them the clarity and peace of mind they are seeking. Take advantage of year-end or quarter-end timing to reach out to your existing customer base to do a business review. Use this as an opportunity to discuss your current supply chain challenges and find out what they are forecasting for next year or quarter so you can make purchasing and staffing decisions. This kind of approach not only informs your own decision making but also strengthens the relationship with your clients.
Of course, this strategy assumes you already have a great relationship with your customers, which means that you will need to prioritize customer relationship management on an ongoing basis to lay the foundation for when you need to reach out.
Increase the frequency of planning and forecasting activities to keep projections in line with current information. Forget the traditional annual plan or 5-year plan – shorten your planning time horizons and prepare to re-plan, as needed. Amy Leschke-Kahle summarizes,
“Today, the traditional year-long or years-long approach to strategic planning is less than irrelevant; it’s an altogether bad use of time. But that doesn’t mean there’s no need to plan. What’s really happening here is that how we engage with strategic planning — our mindset frequency — has to change. We need to enable our teams to plan in shorter chunks of time so we can counter sudden changes with insightful next steps.”
Prioritize frequent and accurate data collection on everything from vendor costs and sustainability to account profitability and scalability. Communicate this data with partners and stakeholders, and operationalize it across the organization.
Expand your business network to include redundancy – backup suppliers and vendors to protect the items most critical to your operation. Where backups do not exist, look for substitutes that can be used without compromising the quality of your products. As Richard Howell explains,
“A business network is [a] key technology that helps boost supply chain efficiency for midsize companies, by participating in an ecosystem of suppliers that can be tapped to lower costs, increase quality, and help ensure service reliability. More importantly, the entire customer experience becomes more straightforward and impactful with quick access to order status, product availability, and expected delivery times.”
Maintain a network of connections that you can lean on if you need to shift your focus temporarily while you find a way around a major supply chain blockage. For B2B service providers, this may include going digital with your offerings as many organizations were forced to do during the lockdowns of 2020.
B2B ecommerce solutions allow organizations to sell better by meeting new B2B buyer priorities without the same kinds of physical requirements. Whether it is adapting B2B sales strategies or offering online self-service purchasing, digital solutions have proven to be far less dependent on traditional sales methods requiring in-person contact while enabling B2B sellers to update their offerings quickly and improve their cash positions as supply chain disruptions occur. The Billtrust team explains,
“As the pandemic forced many businesses to shift online, savvy B2Bs followed suit, transitioning away from traditional ways of doing business that in many ways became untenable during the crisis and adopting ecommerce solutions. This allowed them to meet their buyers where they were, provided greater insight into their inventory and injected a much needed dose of predictability, visibility and control into their operations. B2B ecommerce adoption has been so rapid that according to Forrester, the U.S. B2B eCommerce market will reach $1.8 trillion by the end of 2023, outpacing B2C’s $529.7 billion... And as we navigate through an increasingly unpredictable world, the deployment of a successful ecommerce strategy will continue to be critical for buyers and distributors alike.”
Additionally, ecommerce solutions provide visibility into the B2B purchase process by allowing buyers to track the manufacturing and shipment of their products, which is especially helpful when delays are encountered in getting products to clients.
Utilizing an ecommerce platform is not the only way to weather a supply chain storm. Use a 3PL (or upgrade to a more robust solution) that has the technological infrastructure, resources, partners, and tools to handle these kinds of disruptions on your behalf.
Continue to actively combat fraud – do not let your guard down when confronting supply chain disruptions. During a significant disruption companies become more vulnerable to fraud because they suddenly race to find new providers and invest in new technologies quickly without doing their due diligence. Unfortunately, this leaves companies susceptible to fraudulent activities by bad actors and unscrupulous companies. Continue to invest in data and network security. Read contracts before signing them and check regularly for red flags related to banking, purchasing, inventory, and order fulfillment.
For more information on how to weather supply chain woes and prepare for future disruptions, download our Revenue Development Plan. It will provide strategies to achieve your B2B revenue goals through even the most difficult of circumstances.