Supplier.io's Five Ways to Strengthen Supply Chains
As inflation, trade policy changes and economic uncertainty continue to challenge global supply chains, procurement leaders are rethinking how they source materials and services.
A Supplier.io report, based on insights from 398 companies with a combined supplier spend of US$168bn, outlines five key approaches to finding alternative suppliers and strengthening supply chain resilience.
"Inflation, geopolitical shifts and evolving economic policies continue to disrupt traditional supply chains," says Supplier.io CEO, Aylin Basom.
"Yet, forward-thinking leaders see opportunity in this environment. They are using this time to strengthen their foundation, better manage risk and create lasting business value.
"The organisations thriving today aren’t just reacting to changes, they’re redefining how they source."
1. Acting early instead of waiting for stability
Uncertainty in the supply chain can make some businesses hesitant to act, waiting for a clearer picture before making changes.
However, organisations that move early are positioning themselves for long-term stability rather than reacting to disruptions as they arise.
Supplier.io highlights two practical steps:
-
Shifting the procurement message: Companies are increasingly emphasising the benefits of working with small, local and diverse suppliers to improve flexibility and reduce risk.
-
Engaging with suppliers now: Many organisations are not fully aware of the options available to them. Procurement teams are reviewing their supply base and reaching out to potential alternative suppliers before shortages occur.
A Supplier.io poll found that 54% of procurement professionals have yet to take action on market changes or are still figuring out a strategy. Meanwhile, 46% are already working with stakeholders to adjust their sourcing plans.
The Hackett Group reports that while 64% of companies rank supply chain resilience as a top concern, relatively few have taken proactive steps to diversify their suppliers.
2. Identifying risks & 3. Making better use of current suppliers
Trade policy changes, such as tariffs between the US, Mexico and Canada, could cause supply chain disruptions.
- More than 120,000 engine part manufacturers, including machine shops (66,000), precision manufacturers (29,000) and transmission providers (40,000).
- More than 100,000 food suppliers, including fruit and vegetable growers (44,000), meat producers (44,000) and dairy providers (11,000).
- In excess of 100,000 electronic component suppliers, 150,000 computer and storage device manufacturers, and 114,000 semiconductor providers.
Supplier.io’s analysis shows that companies already work with an average of 537 small and diverse suppliers, many of whom could expand their role with minimal onboarding. Across Supplier.io’s client base, organisations spend a total of US$168bn with more than 214,000 such suppliers.
Economist Laura Boyd highlights why stability is the priority for many businesses: "There is a flight to stability. Corporate leaders are focused on delivering top line growth. This means predictability, visibility into coming quarters and years in a modestly improving economy.
"Any shock to your performance as a company is viewed as a company-specific issue. I can't overstate this enough. Management teams are really focused on delivering performance, growth and stability in this period. Lowering risk of supply chain interruptions is paramount."
4. Using data to guide supplier decisions
Finding new suppliers is just the first step — procurement teams also need to provide decision-makers with clear, data-backed insights to demonstrate cost-effectiveness, risk reduction and overall supply chain resilience.
Yet, according to Supplier.io, 34% of procurement professionals either do not know how to begin diversifying their supply chain or have not yet engaged business stakeholders on the topic.
Among the organisations that have taken action:
7% are directly involved in building supplier strategies with senior business leaders.
25% hold regular meetings with key stakeholders to ensure procurement aligns with broader business goals.
These organisations are better positioned to respond to supply chain risks in real time.
5. Expanding the supplier network
Many businesses assume that small or diverse suppliers may not have the capacity to meet their needs, but Supplier.io’s database alone lists more than 10 million such suppliers across different industries. Companies that successfully diversify their supplier base often follow three key strategies:
Mapping supplier availability: Leaders are identifying suppliers in key regions and sharing this information with decision-makers to highlight alternative sourcing opportunities.
Using detailed supplier data: Businesses are going beyond simple supplier lists and evaluating candidates based on industry experience, financial stability and existing relationships with other organisations.
Developing suppliers for long-term growth: Some small suppliers may need additional support to scale their operations. Many companies are offering smaller initial contracts, supplier training programmes or leveraging external support from organisations like the Small Business Administration and NMDSC.
As supply chain challenges persist, businesses that invest in supplier diversification now will be in a stronger position to navigate future disruptions.
Explore the latest edition of Supply Chain Digital Magazine and be part of the conversation at our global conference series, Procurement & Supply Chain LIVE.
Discover all our upcoming events and secure your tickets today.
Supply Chain Digital is a BizClik brand.