Andraya Frith, Stephen Poloz, Wendy Gross
Oct 8, 2021
The need for flexibility in managing vendor relationships and contracts during times of global supply chain disruption was a recurring theme during Osler’s “Managing Supply Chain Disruption in 2021 and Beyond” webinar. The event was moderated by Andraya Frith, partner, Franchise and Retail, and included Stephen Poloz, Special Advisor, and Wendy Gross, partner, Technology.
Stephen says he believes some global supply disruption is likely to continue beyond the pandemic due to such factors as geopolitical concerns and some governments disrupting international trade for political reasons. What we will see is more use of scenario planning. Companies that are good at this will see greater customer loyalty and rising stock prices, among other benefits.
In light of the pandemic experience, Wendy says there has been an increase in upfront due diligence, not only financially but with operational matters. There is a growing focus not only on suppliers, but on the rest of the supply chain, including subcontractors. Supplier business continuity plans are being scrutinized, and due diligence is being applied to supplier relationships, including reference checks with current and former customers.
Wendy adds there is a growing need for flexibility in contracting, including term and renewal rights, and insolvency termination rights and enforceability issues. Ways to mitigate vulnerability if a termination event occurs are also being explored. The acceleration of technology development in supply chain operations also has contract implications.
In terms of economic recovery, Stephen says that, while the pandemic hit everyone almost simultaneously, the bounce back has been different for each country, depending on such factors as vaccination rates and restrictions. Supply chain issues during the pandemic were largely related to goods as consumers bought products while at home, but the catch up will be mostly services as consumers travel again and return to restaurants. While supply chain disruptions will continue beyond the pandemic, the severity should diminish.
Watch the webinar