How to Execute Supplier Diversification – Pro Tips Procurement Freelancers
Introduction Supplier diversification is a technique used to diminish risk in a supply chain. It is indeed the best way to develop your supply chain and involves choosing backup suppliers with distinct capabilities to offer a recovery strategy in the event of a supply chain disruption. A strategic and proactive supplier diversification can impact your organisation on many different levels. Be it bottom-line savings or CSR, the benefits are increasingly gaining widespread attention. But supplier diversification is not an easy task. There are plenty of pitfalls that you need to avoid. It requires good planning, commitment, and buy-in from across the organisation.
Supplier Diversification
Simple Steps to Follow
The two most important things that you need to keep in mind while analysing the situation are the product and the market. Try to assess as much information as you to understand how the product is manufactured and also the parameters it is required to meet. Similarly, analysing the market is also a vital job. When you evaluate the market, you will find many pieces of data like quality concerns, price fluctuations, capacity constraints, and tariffs. All this information will eventually help you make a better strategy for your diversification.
#1 Analyse the Situation
#2 Develop a Plan
If you really want to make your diversification strategy successful, make sure you tailor them effectively to each product line. At any point, you can engage supplier development engineer experts who can offer you advice on business skills. To build a plan, here are some questions that you can ask: What are the supply chain interruptions that are most likely to happen? Whom do you consider to be the important suppliers to the product? What are the primary parts of the product?
#3 Identify Diverse Suppliers Do your research and find other suppliers that meet your strategic needs and preferences. For instance, if your focus is to reduce location risk by engaging a supplier in a different place of the U.S, then find and make a list of suppliers who have identical capacities in various places of the U.S. It can be a useful resource to locate diverse suppliers, connect with other likeminded organisations, and initiate ideal practices.
#4 Choose Suppliers Wisely
Now that you have made a list of the ideal suppliers that you think would meet the requirements, let your supplier auditors bring it down to the perfect candidates and make a final list of suppliers you are willing to incorporate in the diversification strategy. However, make sure these suppliers qualify the needs of the strategy and are the perfect choice for the products out of all the above-identified suppliers.
Conclusion Just as the organisation invests in their employees to make them successful, the same goes for suppliers. Businesses and procurement teams should try to invest the time and effort to help suppliers navigate through organisational norms and provide them with the support necessary to succeed. Whether you are supplier development engineer experts or organisations looking for professionals having acumen, get in touch with us. We will get an ideal match for you.
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