Sourcing materials and suppliers

May 14, 2009

All business ventures have to source materials. The extent to which this affects the business however is very diverse. Some service industries may only need stationery supplies, professional services etc. A supply company’s core business revolves on the product or product lines that they sell. A disruption in the supply of a core product can result in either major reorganisation of the business or even result in the business collapsing. Manufacturing Companies need raw materials to produce their products. Changes in product supply, be they driven by market, seasonal, environmental or technological changes can result in major business disruption or even sector extinction. Look at the market disruption caused when CFCs where banned. The entire aerosol market was faced with complete change or complete extinction. Therefore one can define materials supply to a business as a) raw materials, b) essential product range and c) other materials used in the business. So the questions you must ask yourself are:

• What raw materials does your business use, if any?
• Who are your suppliers?
• What other suppliers could you use?
• What are the advantages of using your current supplier?

• What goods do you buy to sell?
• Who are your suppliers?
• What are your alternative sources of supply?
• What are the advantages of your current supply source?

• What other products do or will you use?
• What are your suppliers?
• Can you simplify your sourcing of the products?
• Are they all necessary?

Sourcing suppliers is very important , particularly early on in the life of a business. Whereas price is important, reliability is often just as important. If a supplier is reliable and delivers the right products, at the right amount most of the time, then these are people you want to keep close to your business. However, if a supplier, no matter what price they are selling to you at, lets you down initially or regularly, then it is time to evaluate whether you can find a more reliable source. Reliable suppliers allow you to make promises to your clients that you can deliver. It is very easy for an unreliable supplier to leave you very embarrassed with one of your customers and potentially losing trade as a result. Build a very close relationship with your main suppliers and make sure you look after them in return.

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One Response to “Sourcing materials and suppliers”

  1. shane Says:

    Congrats on starting this. Excellent resource.

    Shane


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