Globalisation has changed the playing field for businesses, in particular manufacturing companies. There is the opportunity to reach customers in foreign markets and supplier relationships are now on a global scale.
However, this brings with it the added risk of external factors such as natural disasters, political instability and currency fluctuations.
Now, more than ever, businesses are sourcing multiple suppliers for the same products/raw materials. This reduces the reliance on one or a few suppliers but it introduces the complexity of managing a diverse supply chain.
Here are some things to consider when dealing with multiple suppliers:
With shipments coming from all over the world, there is a vast range of delivery times and associated costs for each product from each supplier. For example, Supplier A in China may be able to deliver Product A within three weeks but Product B may take six weeks to arrive from the same supplier. Knowing and managing this information is crucial to a business’ purchasing efficiency and stock management.
If the quality of goods from each supplier is equal, the most important considerations thereafter are price and lead time, depending on the urgency of the customer.
If suppliers know that they do not have exclusive contracts with a business, this may motivate them to offer quality goods at competitive prices. They may even engage in ‘price matching’ with the other supplier(s).
A supplier’s order turnaround time may be its unique selling point and therefore allow it to charge more than its competitors.
A supplier’s capacity to deliver large orders may be a deciding factor in choosing a provider. If a business gets a large customer order, it needs to be sure it can deliver it in the timeframe quoted. It is important to know the scale and size of suppliers’ operations. (If however, each individual supplier of the same item cannot meet demand, this is where it is beneficial to have multiple suppliers.)
Purchasing departments must consider all of these factors before placing an order with a supplier. An automated approach is the most time-efficient method of doing this. Flowlens provides detailed sales information about the quantity of materials required and the timeframe allowed for production. This automatically calculates the delivery time afforded and in turn, selects the most relevant, cost effective supplier to order from.
If you are currently struggling with managing multiple suppliers, Flowlens can help your business.
We’ve combined the most popular features of our Sales and Operations modules to create a starter solution for businesses taking the first step to creating a more efficient Sales Ordering, Stock Management and Purchase Ordering process.
Our manufacturing software is cloud-based, so you are assured of reliability and availability across devices, with no hardware upgrade costs, or expensive per-user licensing.