Understanding the importance and value of your supply chain and sourcing professionals. Their role in helping to make sure the right suppliers are constantly and consistently validated, vetted, on-boarded, and trained to sustain your brand integrity and quality products.
Exploring your existing suppliers; why are they the best supplier for that particular type of product? Is it because:
- Credit terms?
- The lowest price?
- You can work with their minimums?
- They are the only supplier you know?
- Long-term relationship?
- Specialize in your business?
- Manufacture your product types?
- Specialize in the category?
- Or do they make similar products?
- Past history, on-time deliveries, quality, and cost reduction
- They reduce headaches and are proactive in business?
Now that we know why you do business with your existing suppliers why would you want to source new suppliers?
Below are some positive solutions and reasons to look for new suppliers:
- Improve the product; find better fabrics, trims, and manufacturers.
- Find multiple sources for the same products, engage several suppliers, and reduce costs.
- Verify costing, see what others are charging, negotiation, are they willing to work with you?
- MOQ (Minimum Order Quantity), what are others offering?
- Capacity issues, does this supplier have availability or are they outsourcing?
- Lead-time/delivery, what are they offering? What is their success ratio?
- Quality, processes, documentation, and management or lack there-of.
- Technical knowledge, what’s their depth of understanding? Do they know what they are talking about?
- Optimize performance, track and measure, be proactive, not reactive
- Mitigate risks, qualifications, certifications, performance, and financials
- Business structure, what is the vision, values, and mission statement
- Business practices, are they all about constant improvement, lean, and six sigma growth and transformation?
- New product development and innovation, see what others are offering, idea vetting and generation.
- Protect your brand, your companies brand(s) integrity, are they tarnishing your brand by unprofessional decisions, unethical allocation, and practices.
If you are involved in sourcing, how do you find new suppliers? Do you:
- Ask colleagues about suppliers they have used with success?
- Look at online platforms for supplier intelligence and information?
- Search online through Google, Chrome, Bing, or Baidu?
- Attend industry events
- Speak to colleagues about challenges and issues?
- Attend domestic and overseas tradeshows?
- Travel domestically and overseas to meet with new prospect factories?
If you engage in any of the above, how much money do you spend every year to facilitate the above? Does this become apart of your product TCO (total cost of ownership)?
Once you have confirmed your suppliers and your factories, how involved are you with selecting the factories that actually make your production?
- Do you let your agent pick the factories?
- Or do you depend on your supplier to make the production?
- Or do you work directly with the factory?
One more consideration for selecting suppliers and factories, do you care if the factory you selected outsources? If you care, how do you follow up and check to verify that they are not outsourcing?
At this point, I could go on about social responsibility, ethics, compliance, policies, procedures, systems, manuals, workbooks, training, education, and more but then this would be a book or an educational seminar. Stay tuned for future articles where we would cover the above and more.
In closing, it is best to make educated decisions that provide proactive solutions to reduce headaches, costs and increase revenues.