Organizations have emphasized supply chain resilience and agility in the last couple of years; however, building a diverse and robust supplier base is one of the foundational pillars of each.
Global supply chains have had a tricky couple of years due to the pandemic, wars, and other world conflicts. There has never been a better time to diversify the supplier base.
Building up your supplier base can be tricky and sometimes overwhelming. In this article, we will explore some tips to help you navigate it properly.
1. Know your current suppliers and their weaknesses
Before adding new suppliers to your supply chain or business, you must correctly assess your current suppliers to find their strengths and weaknesses.
Knowing their strengths and areas where they are lacking will go a long way in helping you get the most out of your new suppliers.
It will also help you source for suppliers who complement your current suppliers, creating the perfect harmony for your supply chain.
You don’t want to diversify or add more suppliers to your roaster just for the sake of doing so or because you think it is the right thing to do.
There has to be a clear strategy, and assessing for S & W is a great way to start.
2. Improve your supply chain visibility
As much as supply chain agility and resilience are important, supply chain visibility might be more important. This is because it connects several parts of the supply chain together.
With supply chain visibility, one supplier or a hundred will not make a difference. It allows you to seamlessly communicate your needs to the suppliers and plugs them in enough to respond rapidly.
With multiple suppliers, you will need to create a method of seamless communication that doesn’t weary your supply chain team and complicate your operations.
Read our article here for details on improving supply chain visibility, especially in Africa.
To effectively set up supply chain visibility for you and your suppliers, there has to be a great level of transparency and access to information.
3. Establish criteria for evaluation
It is essential to conduct an evaluation process while building a diverse supplier base. This evaluation will ensure your new suppliers are the right fit for you.
It will be easier for you to choose the right supplier if you have pre-defined criteria that clearly explain what you’re looking for in one.
When determining whether a supplier is the best fit for you, be thorough and consider aspects like a history of delivery quality, the opportunity to lower overhead expenses and financial stability.
If necessary, adjust your criteria according to the needs of other departments. Decision-making will ultimately become more effective as a result of this.
Ensure strict adherence to this evaluation process to protect your business and supply chain interests.
4. Consider making it easier to onboard new suppliers
It can be difficult to onboard when collaborating with a new supplier, depending on the supply chain policy. It is also particularly challenging if there is a deadline to meet.
When faced with this situation, it might be beneficial to relax some of those processes, especially for suppliers with a good history and pedigree in the market.
Sometimes, some of the processes are unnecessarily complicated and could impact the supplier’s experience with the organization.
Remember, when making an exception, it is important to do it for only trustworthy suppliers.
5. Monitor performance
When building a diverse supplier base or onboarding new suppliers, ensuring they are the right fit for your supply chain and organization is essential.
Set up KPIs such as delivery rate, lead times, and product quality to monitor the supplier’s performance.
Supplier KPIs also ensure your suppliers know what to look out for when dealing with your business.
It communicates your expectations and priority to the new suppliers, which helps them serve your supply chain better.
Obinabo Tochukwu Tabansi is an ex-supply chain professional turned ghostwriter with a decade of experience working in different facets of the supply chain. Today, he lives his passion for writing on all things supply chain and helping clients from across the globe communicate their thoughts and solutions seamlessly. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the continent’s complexities.
