Building a Resilient Supply Chain
April 1, 2022
If a supply chain is delivering decent results, it is common for even the most experienced importers to feel as though they know and do enough to manage it. Many importers are busy CEOs focused on many other things aside from their sourcing program—sales, budgets, staff, etc. A competitive supply chain requires a sustained commitment of time and resources to stay ahead of challenges and to identify opportunities, which will help ensure a thriving sourcing process even when confronted with significant disruption.
Having a dedicated sourcing team can help tremendously to build resilient supply chains. There are three major initiatives that a dedicated team could work on every day to ensure importers stay competitive.
One of the main functionalities of a dedicated sourcing team is studying clients’ product lines and outlining potential improvements that could provide cost savings or additional revenue, such as:
– Product improvements and quality: Improvements to existing product specification sheets (PSS) or inspection specification sheets (ISS) or drafting of initial PSS and ISS for new products. CPG has a team of engineers and sourcing specialists that provide specific quality assurance suggestions to improve product quality.
– Analyzing competitors: A great sourcing team should also study their clients’ key competitors—their websites, product offerings, and current suppliers—to keep a pulse on their market and identify new opportunities and areas for improvement, as well as suggest product ideas in the interest of keeping clients’ brand competitive and innovative.
Many importers often measure cost savings in dollars and cents relative to product cost only. However, there are savings in terms of mitigating risks as well. A professional sourcing team always plans ahead, gathering and using relevant information to reduce or avoid the effects of possible challenges by:
– Vetting existing suppliers and/or qualifying existing, potential suppliers: This can prevent future headaches and ensure competitive pricing. This also gives importers a clear vision of suppliers’ capabilities while avoiding expensive and potential reputation-damaging quality issues down the line.
– Helping with contracts and negotiations: Suppliers rarely offer the lowest cost or best terms upfront. Having an experienced team negotiate the best terms at the optimal price saves money before it is spent.
– Implementing Quality Assurance (QA) protocols: One bad shipment can wreak havoc on a business. At CPG, our QA team’s philosophy is that prevention is better than a cure. Importers can realize tremendous savings by implementing exceptional quality assurance processes, including post-production and pre-shipment inspections.
– Managing shipping and logistics: An excellent team will have extensive logistical planning experience and a robust network to ensure the lowest cost and on-time delivery. Getting goods to market when expected is crucial to ensuring cash flow.
– Staying on top of current events that may pose challenges: A China sourcing team must stay in-the-know about current events that may pose challenges or disruptions. This helps them plan for or prevent issues before they affect the sourcing process.
– Helping to protect Intellectual Property (IP): Ensuring IP protection will prevent importers from losing revenue to copy-cat products. There are many ways to do this, such as securing optimal Non-Disclosure (NDA) or Non-disclosure, Non-use, Non-circumvention (NNN) and mold and tooling agreements. CPG discusses these topics in-depth in other blogs: 7 Ways to Protect Your IP and IP Protection: NDA or NNN?
Staying competitive in trying times relies heavily on being able to identify opportunities. A dedicated China team should always be searching for ways to increase profitability for their clients by:
– Benchmarking suppliers: Identifying many potential qualified suppliers ensures the best price and quality. Importers are often captive buyers—loyal to a specific supplier because they’ve spent a lot of time building the relationship or are financially incentivized. Often, there are other suppliers that can provide superior quality and offer better costs.
– Identifying better components and raw materials by finding suitable alternatives at a lower cost, at equal or better quality.
Building a resilient supply chain and getting the best results requires intimately understanding the supply landscape. Having a dedicated China team to plan for and mitigate risks, identify opportunities, and help stay informed about possible challenges can provide significant cost savings to even the smallest importers, which translates into larger profit margins and a robust supply chain that can handle any challenges.
CPG has an office and team in Beijing whose objective is just this. For more information on how CPG can help you build a resilient supply chain, contact us.
By Jocelyn Trigueros