Navigating the Procurement Landscape: Strategies for Diversifying Your Supply Base
Procurement processes can be complex, particularly for those tasked with the responsibility of diversifying their company’s supply chain. At a Fortune 200 company where I manage procurement, we face challenges due to our heavy reliance on suppliers in China. In particular, our focus is on sourcing for thermoforming and injection molding projects.
Our current concern lies in making our bids more attractive. Despite our efforts, we’re encountering a lack of interest from potential partners, particularly within the United States. This is likely due to the moderate scale of our orders, which typically don’t exceed 100,000 units annually. Such volumes may seem insignificant to larger thermoformers who handle substantial quantities, especially those engaged with the food packaging sector.
Given this situation, how should one proceed? There are several potential strategies to consider. One approach is to explore partnerships with smaller, boutique manufacturing firms. These “mom and pop” operations might find our scale ideal and could offer more personalized service.
Another strategy is to look beyond the US market. Countries like Vietnam and Thailand are rising stars in manufacturing, known for their competitive pricing and quality output. They might be better suited to handle orders of our volume and could provide the diversity we’re seeking in our supply base.
In conclusion, diversifying your supply chain is essential in today’s global market to reduce dependency and mitigate risks. By targeting smaller domestic manufacturers or exploring opportunities in emerging markets, you can create a more resilient and adaptable procurement strategy.
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