My Three SRM Wishes in a Crisis
Obviously, I wish that we can flatten the curve of infection so that our health systems all around the world can cope with the COVID-19 crisis.
The secondary impact of this pandemic however, is economic, and many businesses are going to suffer catastrophic losses at this time due to the global shutdown of cities and commerce. I think as a business community we will want to be more prepared for a situation such as this next time it occurs.
So I was thinking, if I found a lamp, gave it a little rub, and a magic Genie came out offering me three wishes for my business, what would I wish for?
Wish Number One
At the start of this year, China shut down 90% of their manufacturing capacity affecting supply chains in every developed country around the world. I wish that my contract management system could highlight the geographical risk in my supply chain. The ability to track the tiers of supply, i.e. my suppliers’ suppliers, so that I can see where my supply will potentially falter, should there be a problem in a particular country or region.
Wish Number Two
A friend told me that one of her major suppliers called to tell her that they needed to invoke Force Majeure on one of their major direct supply contracts. They are completely unable to deliver as their staff cannot work from home and still produce their product. This has the potential of disrupting supply through to her customers, drastically affecting revenues, and potentially shutting down her whole business and putting her staff out of work. The supplier has asked for a copy of the contract so that together they can find out how Force Majeure works, and what the terms are. Who’s going to pay for that? I wish that my friend had a contract management system that allowed her to search for a condition in a contract like that, and showed her where she could find a copy of the contract.
Wish Number Three
In this dreadful time, some businesses will not recover from the stresses placed on them by the restrictions on trade. I’ll need to know if my suppliers cease to trade. So I wish that my contract management system verified my supplier network daily and notified me if any of my suppliers suffer an insolvency or deregistration event. If a supplier goes into administration or liquidation I need to know as soon as possible, sooner than they would potentially notify me through due process and disclosure obligations.
Like the baby boom following the Second World War, I believe that following this pandemic, there will be a great rise in organisations implementing better systems to manage their contracts and supply chain, so that next time this happens, they will be better prepared.
Stay well everyone.