31 Aug 2021

Why Having Multiple Suppliers Is a Great Idea

Every industry has its purchasing horror stories. In manufacturing, we have our fair share. And as buyers, sometimes you’re left with the short end of the stick. Supply chains can break down (particularly when based overseas, as we’ve seen in last 18 months); specifications can be misinterpreted; lead times can go from tight to undeliverable; communication can deteriorate; and relationships can sour.

We recently worked with a client who was suffering repeated problems with their original (lone) supplier. The supplier was cheap, and happy to resolve issues at no additional cost, but its lead times were extending to beyond what was acceptable.

We’ve received feedback in the past that, while our quality control and delivery times were exceptional, we weren’t flexible enough with our costs for additional required work. Obviously, we took this feedback on board and now offer reasonable extra, unplanned work as standard (without further charge). However, not every provider will take client feedback so seriously.

If you work in procurement, you'll be no stranger to these issues. To some extent, they’re part of the job. But what can you do to minimize the risk of things going wrong?

We recommend a two-pronged approach. The first is to have a minimum of two suppliers. Many manufacturers have great, years-long relationships with their single supplier and so do not communicate with alternatives.

It’s often too late to take alternative action by the time you realise your supplier is going to let you down. By then, potential back-ups are at capacity, and can’t offer any immediate help. And without any prior communication, or previous supply history, back-ups probably wouldn’t respond or ultimately deliver quickly enough anyway.

And an important consideration is value for money. Fair pricing can only be properly gauged if you use competitive tendering from alternative supply sources – value can’t be fully measured if you only choose to use a lone supplier.

An existing relationship with (at least) a second supplier you can use as a dual supply source can avoid any headaches.

Some manufacturers can actually have too many suppliers - over-saturated, overseas, non-communicative supply chains, which can cause the same problems for different reasons. In these cases, a trusted UK-based supplier can be a safer option and avoid things getting unnecessarily messy.

The second prong is to ensure you communicate openly with your supplier(s). Be clear about your expectations. Give accurate, detailed specifications and instructions. Ask them to guarantee delivery dates. And be readily available to them throughout – responding promptly when they need your input, and resolving any issues they flag up will minimise the overruns you’ll be so keen to avoid.

If you are considering bringing an additional supplier on board then our blog ‘5 Problems When Buying From A New Supplier’ is for you. And you can read more about effective communication with suppliers by reading our blog ‘How To Choose Your Next Tooling Supplier’.

Having one supplier is easy and convenient, but it isn’t good practice. Using two or three suppliers, and communicating with them openly at all times, is the key to avoiding the headaches that the lone supply route can bring.

If you’d like to discuss your next project in more detail, we’d love to hear from you. Let us know you'd like to talk by requesting a call back

Did you find this article useful? If you did, then why not check out some of our other content? We recently created a free guide about how you can save both time and money when procuring checking fixtures: Buying Checking Fixtures Better