The importance of supply chain management
Beth Armesto

3 minutes

The importance of supply chain management

Effective management of your suppliers is crucial for businesses of all sizes. Knowing exactly what resources are available, where and at what cost is vital to ensuring you’re investing in the right partners – getting the experience and skills you need, whilst getting value for money.

Perhaps more importantly, though, effective supply chain management (SCM) is key in a Covid-hit environment. Whatever the make-up of your supply chain, remaining agile in an increasingly uncertain world by having suppliers which can flex and adjust with your business will be critical for any swift changes that are needed, to keep your organisation competitive and able to solve customer challenges.

But why is supply chain management so important from a workforce perspective?

Meeting ever-changing business needs

The pandemic has truly changed the world of work as we know it. What a firm’s workforce looks like today is significantly different to how it looked at the beginning of the year. And this will only continue to rapidly evolve as we work our way out of this crisis.

If we were to track on a graph how demand for contingent resources within many businesses has changed throughout 2020, it would look very much like a roller coaster ride at the moment, with local COVID-related restrictions increasing and decreasing the need for particular workers at a minute’s notice.

As a result, procurement teams are facing the need to scale up or scale back resources swiftly across the supply chain. That’s where effective SCM plays a critical role. Managing the contracts that you have in place with your suppliers and ensuring the flexibility you need is there will deliver significant value in the longer-term.

Streamlining resources

It can be all too easy once you’ve engaged a supplier to let them carry on with the job at hand and review only when needed. However, supply chain strategies should include consistent and regular reviews or assessments of where resources can be streamlined.

As we’ve mentioned previously, redeploying temporary talent to other areas of the business is much more efficient than carrying out a whole new recruitment effort. If transparency is built into your SCM, it’s possible to identify where there are resources that are set to soon leave the organisation due to an end-date of a contract, for example, that may be able to fill an upcoming position in another area of the organisation.

Having the controls in place to manage this will have a positive impact on the company. After all, the individual or team in question will already have the knowledge and experience within your firm to hit the ground running.

Reducing operating costs

Arguably one of the greatest benefits of a well-thought out and prepared SCM strategy is the potential to reduce supply chain costs. Aside from effectively managing cashflow, supply chain strategies can help procurement teams identify where finances may need to be improved.

If a particular supplier is draining budgets, there may be the potential to reallocate work to another, more cost-efficient supplier. But without a strategic management plan in place that allocates responsibility for cost reviews – and is completely transparent no matter who is the main point of contact for the supplier – budgets could be impacted before you’ve had a chance to react. In tough economic times, this is a particularly pertinent issue and really does demonstrate the importance of supply chain management.


Having a structured management process in place for your supply chain is also crucial to drive compliance. As we mentioned in a recent blog post, engaging individuals under an array of models and through multiple suppliers presents risk. If a supplier isn’t providing resources in a compliant manner, in many instances the associated risk transfers down the supply chain to the end-organisation and will come back to the procurement team in one way or another.

However, effective global supply chain management that includes complete transparency around how individuals are employed and how compliance is managed will reduce the risk for your business. That’s not to say that procurement teams need to manage this alone, of course. A Managed Services Provider (MSP) will have the experience to drive compliance across your supply chain, for example.

Improves candidate experience

Just as in a retail setting, your SCM execution directly impacts the customer – or in this case, candidate – experience. An improved supply chain strategy will leave every worker engaged by your business, either directly, through a supplier or under an MSP model, with a positive view on your brand.

So, while your supply chain might not be delivering goods, ensuring it flows efficiently for the benefit of the workforce will provide longer term talent attraction benefits.

The importance of managing your supply chain: why a partner can help

While we certainly understand the importance of managing your supply chain (after all, we’re highly experienced delivering this for procurement and HR teams!) we also know that it can be challenging and time-consuming for already over-stretched teams. And in such a volatile economic climate, the pace of change can present significant challenges for businesses that are managing global supply chains in-house without external support.

At Guidant Global, we have the expertise to manage temporary worker recruitment for an organisation and deliver end-to-end management solutions for your contingent workforce – from supplier management to strategic workforce planning.

If you’re looking to better manage your talent supply chain, we have the knowledge and skills to help – why not contact the team today to find out more?

Download our free guide to first generation MSP solutions for more information on how a Managed Services Provider model can work for your business

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