A supply chain is only as strong as its weakest link. For example, it is no use to you and your business if you can source raw materials at highly competitive prices, only for the supply to always be late. This makes your supply pipeline unreliable.
The process by which you find suppliers who are reliable in every way is a very difficult operation and supplier sourcing needs to be at the very centre of every decision made by the business. Availability affects production, cost affects accounting, quality affects sales and so on, ultimately affecting your margin and profitability.
Obviously, the closer a supplier is to you and your business, the more efficient the delivery should be but that is not always the case.
Managing overseas suppliers can be more efficient in the long run but initially total reliance on delivery of raw materials or finished parts or goods from overseas is fraught with risk that no number of guarantees, either financial or otherwise, can alleviate.
As the supply chain becomes more routine, the opportunity to expand and search for better deals with smaller, hungrier suppliers who do not have the global reach but do possess a growing reputation presents itself.
Naturally the first place to look is the internet but that comes with many concerns over delivery and reliability.
Perhaps a more sensible first step is to attend trade exhibitions and shows within your market where suppliers you can “touch” and products you can “feel” will be on display. It is unlikely that you will find a supplier who exhibits the exact bespoke product you are looking for, but it will introduce a producer from within your sector.
Once a relationship has begun, factory visits can be arranged and your technical teams (if required) from both sides can start to discuss the basics of the product while buyers and accounting discuss delivery and price.
The “internet age” has provided business with a great deal of opportunity across the entirety of its business but one of the most radical improvements has been within the area of the supply chain.
Looking for a supplier is one thing but imagine trying to find out more about his reliability, efficiency and cost without access to the web! Whilst it still pays to do a certain amount of investigation first hand, the wealth of background available means that this has become a function of the business rather than a major policy decision.
About Alan Hill
Alan has been involved in the FX market for more than 25 years and brings a wealth of experience to his content. His knowledge has been gained while trading through some of the most volatile periods of recent history. His commentary relies on an understanding of past events and how they will affect future market performance.”