A purchaser’s job in modern industry is not easy, and is often critically important to your company’s operations. Successfully managing inventory and maintaining the proper flow of raw materials can mean the difference between competitiveness and failure. A hiccup in raw materials inventory management can lead to lost orders, unhappy customers, and expensive stop-gap measures.
Below are three tips to help optimize your raw materials supply chain, allowing you to be more competitive, reduce prices and lead times, and win more business.
Get clear on what you want—not just what’s “available”
This may be good life advice in addition to smart purchasing advice. Often we accept the best solution that’s readily available instead of insisting on exactly what we truly want or need. Any raw material that requires some additional handling before you can actually use it is a potential opportunity to streamline. We’re so used to buying “off-the-shelf” products because it seems easier than shopping around for the best fit—but this can be a costly mistake!
For example, if you’re buying 50” master rolls of adhesive tape—the “standard” size in the industry—but your process requires only 40” width, then you’re paying the supplier for the offcut. Although this is clearly wasteful, many customers are resigned to the idea that “that’s just the way things are,” accepting the waste as inevitable. In fact, there are competing suppliers that would be thrilled with the chance to provide a custom solution that fits your exact need. This has been described as a “pull” model (versus a “push” model), in which the customer dictates what they need and want to the supplier, instead of the supplier dictating the choices the customer is allowed to have. Nimble suppliers capable of competitive, custom solutions exist in many, many industries—it’s worth the extra effort to look for them in yours!
Put “sacred cows” out to pasture
Loyalty is a wonderful virtue, of course, but clinging to the same supplier should not stand in the way of your business competing and growing. Some long-standing vendor-supplier relationships are built on mutual benefit—a great partnership—while others persist mostly out of inertia, or resistance to change. Sometimes long-term suppliers, especially very large ones whose employees churn on a nearly constant basis—lose sight of their everyday customers’ needs and can become complacent. If you’ve purchased the same raw material from the same vendor for a long time and a new player enters the marketplace, you owe it to yourself to at least investigate how the newcomer could satisfy your needs as well or better than the incumbent.
Partner with the right supplier
A good supplier is one that always meets your expectations. A great supplier, then, is one that consistently exceeds your expectations. Ask yourself whether your supplier is merely a vendor who takes your orders or a true partner who works with you to find solutions to your problems and helps to ensure your success.
In business, as in life, it feels good to get exactly what you want without having to settle. Finding the right supplier partner can breathe new life into your business and keep the wheels turning smoothly.