**London**: In a new series, David Window discusses how well-developed contracts at the procurement stage are essential for supply chain resilience, emphasising best practices, risk management, and the integration of procurement and continuity strategies to enhance operational adaptability.
In a newly published three-part series, David Window, a Fellow of the Business Continuity Institute (FBCI), discusses the crucial role that contracts play in establishing resilience within supply chains. The series highlights that a resilient supply chain begins at the procurement stage, exploring how contracts can be strategically developed to withstand operational challenges.
The first article delves into the foundational elements that constitute a supply chain, which transcends mere physical distribution of goods. According to Window, supply chain definitions must encompass procurement, logistics, and warehousing to fully capture the interconnected nature of these elements. This broader perspective is vital, as it casts a spotlight on the procurement process as the starting point from which supply chain resilience is built.
The significance of contractual agreements in the supply chain process is underscored by Window’s assertion that risks associated with these contracts must be acknowledged alongside geographical considerations. This view aligns with best practice frameworks such as the BCI Good Practice Guidelines (GPG) Edition 7 and international standards like ISO/TS 22318:2021, which focus on resilience rather than merely identifying risks associated with suppliers’ locations.
The series further addresses the importance of business impact assessments and service level agreements (SLAs) in fostering supply chain resilience, with a commitment to practical guidance in subsequent articles on optimising contractual processes. SLAs, which are critical tools for ensuring accountability and quality between service providers and clients, form an essential part of a contract’s framework, according to Window.
A key aspect discussed in the article is category management, a technique that aids procurement professionals in understanding market dynamics and spending patterns. Window notes that incidents within the supply chain often occur within its different ‘tiers’, emphasising the role of category managers in identifying weaknesses and potential risks throughout these layers. This method encourages a comprehensive view of the supply chain architecture, prompting essential questions about supplier dependencies and vulnerabilities at various levels.
In his commentary, Window insists on the necessity for a cohesive approach among procurement professionals and business continuity experts. He states that true resilience emerges when both disciplines are integrated into the procurement process, emphasising that contractual risk management—not just physical supply risks—should be prioritised in resilience planning.
The use of terminology such as “third-party suppliers” prompts further discussion on legal implications. While SLAs are agreements between two parties, the concept of third-party involvement can complicate accountability and enforcement in contracts. Window draws attention to the UK’s ‘Contracts (Rights of Third Parties) Act 1999’, which allows third parties to enforce contractual terms, thus elevating the significance of understanding relationships within contracts and the associated risks.
In closing, Window outlines that while the tangible aspects of supply chains often capture attention, the groundwork for resilience is laid in the procurement and contractual frameworks established beforehand. A proactive strategy that highlights the importance of contracts, supplier engagement, and risk at all tiers can pave the way for a robust and adaptable supply chain model. He asserts that creating resilience in supply chains must begin inherently from the contracting process itself, advocating for collaboration between procurement and continuity professionals as imperative for success.
Source: Noah Wire Services
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