Negotiating Tip #41:
Don’t Overlook the Obvious
It may seem obvious, but now is the time to review how vulnerable is your supply chain to sudden interruptions. Look at what is happening to hospitals whose usual suppliers pretty much stopped deliveries at the same time as their demand rose 10 or 100 times – not just for masks and ventilators but a whole range of products.
We negotiators are as subject as anyone to the natural human tendency, when seeing a catastrophe happening to others, to sympathize but also to overlook the obvious possibility that the same thing could happen to us. If things are a bit slow, this is a great time to review the vulnerabilities of your firm’s supply chain. And not just your supply chain, but your suppliers’ supply chain.
Now is a great time to ask yourself and to ask your suppliers some blunt questions: how dependent are you and they on a single source for a key component? What kinds of stocks do you and they keep on hand in the event of a supply interruption? What are your and their backup plans in the event their usual sources of supply are not available? If you or they are relying on a world-wide supply chain, what are the plans if international shipping is interrupted?
If you or your suppliers can’t answer these questions with well thought-out plans, consider what your company could do to reduce vulnerability, such as develop a relationship with additional suppliers or hold more inventory. Or even be more creative; look at how hospitals are seeking out substitutes for masks and ventilators by looking at related products that are not as good but better than nothing.
Plus now is the time to think about what might lead to a dramatic national need for your product, or for a related product you might be called upon to produce (called upon either by public pressure or even by Washington invoking the Defense Production Act). Who would have thought that toilet paper would suddenly become so valuable people have been stealing it from public toilets?
In other words, learn from the coronavirus pandemic to have at least a skeleton plan for the completely unexpected.