Navigating supplier changes as a Food Producer

In the dynamic world of the food industry, change is constant. One such change that can profoundly impact food producers is when a supplier goes under or changes ownership. What happens to the debts owned and what steps can food producers take to mitigate the impact on their bottom line?

If a supplier changes ownership, the new owners typically assume responsibility for the existing debts. However, this can lead to changes in payment terms, contracts, and even the quality and consistency of the supplied goods.

So, how can food producers mitigate the impact?

1.       Diversification: Don’t put all your eggs in one basket. Working with a variety of suppliers can reduce the impact of any one supplier going under or changing ownership.

2.       Contract Clauses: Include clauses in your contracts that address the possibility of a supplier going under or changing hands. This could involve clauses that protect your interests, like retaining the right to terminate the contract or requiring the supplier to maintain a certain level of quality.

3.       Insurance: Credit insurance can help protect your business against the risk of a supplier not paying its debts. This type of insurance can provide a safety net if a supplier goes under.

4.       Monitor Your Suppliers: Keep an eye on the financial health of your suppliers. Regularly review their credit ratings and any news about their business.

5.       Embrace Technology: Implement inventory management and traceability platform like NotaZone. NotaZone can provide real-time updates on stock levels, alerting you in advance if a supplier fails to deliver giving you valuable lead time to source alternative suppliers.

Changes in suppliers can have significant repercussions, but they don’t have to spell disaster. With a proactive approach, food producers can navigate these changes smoothly, minimising their impact on the bottom line.

If you would like to get started with NotaZone, booking a demo with our team is as efficient as using NotaZone to manage your stock and trace. Get in touch today!