Supplier Failure and its Impact.
Around 84% of Small and Medium Enterprises that is companies with less than 250 employees, will suffer an impact as a result of supplier failure in a three year period. Of these around half will have a significant impact on the profitability of the company, however in some cases the effect is much more severe and can lead to reputational damage and loss of customers.
The more specialised the business the harder it can be to find a suitable replacement supplier, even finding a supplier may not provide the availability of supply that the business requires at short notice.
A non specialised component is likely to be readily available from multiple sources, whereas a specialist component may not be available from more than a handful of specialist suppliers. So ensuring that there are relationships with multiple suppliers, especially if there are specialist requirements – is important.
But it is also important to recognise that even the simplest of components or material being unavailable can have a serious impact, running out of packaging materials stops a business if it needs it!
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